Broadband providers iiNet and Internode will offer compensation to more than 11,000 customers who could net get the internet speeds promised in the NBN contracts under the latest crackdown by the consumer watchdog the ACCC.
Both companies are owned by TPG Telecom, which today revealed its half year revenue was flat at $1.25 billion, as the second tier telco gets hit by lower margins as customers are forced to migrate to the NBN. Underlying profit was up 4.9% to $217.7 million.
TPG, along with Telstra and Optus, have already been caught by the consumer cop over misleading NBN speeds in the last six months and were forced to compensate their customers.
TPG now faces an additional hit with more than 8,000 iiNet customers and 3,000 Internode customers on fibre to the node (FTTN) and fibre to the building (FTTB) NBN plans involved in the latest compensation deal.
The ACCC says 64% (7,621) of iiNet customers on a 100/40 Mbps FTTN plan could not receive the speeds they purchased, with more than a quarter (1,925) of those people not even receiving the speeds of the next lower plan, 50/20 Mbps.
Some 1,720 (34%) Internode customers on the 100/40 Mbps FTTN plan has similar problems, with a similar percentage (479) unable to even receive 50/20 Mbps.
iiNet and Internode will contact affected customers by email or letter by 27 April to let them know what their connection’s maximum speed is and outline the alternatives. The compensation options range from moving to a lower tier speed plan with a refund, or cancel their plan without cost and receive a refund.
ACCC Commissioner Sarah Court said her organisation now has five court-enforceable undertakings from internet service providers over NBN speed claims.
“Fixing misleading claims about internet speeds during the transition to the NBN is an enforcement priority for the ACCC and we strongly urge other providers to act quickly to ensure their advertising is accurate,” she said.