Most NBN users are still sticking to the slow lane -- and staying there


The latest NBN wholesale numbers from consumer watchdog the ACCC shows Australians are sticking to the 25Mbps speed tier, the lowest level the NBN is obliged to provide.

The NBN is working on ways to encourage retailers to sell — and for customers to buy — higher speed plans to increase the average revenue per user (ARPU) from $43 currently to the $52 threshold it needs to pay back its debts to the government.

The urgency of that campaign was put into focus by the latest quarterly numbers from the Australian Competition and Consumer Commission, which shows the 25Mbps tier represents 55% of all serviced connections – the same level at the start of the year, despite an accelerated deployment to urban areas.

Meanwhile the fastest commonly available tier of 100Mbps enjoyed 12% patronage, which is little changed from the 11.8% take-up rate at the end of 2016.

For the quarter ending September 30, 29% of services were still on the budget-level 12Mbps tier, which the NBN doesn’t count as fast broadband and doesn’t meet the minimum speed requirement in its charter.

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For some people on fibre-to-the-node or fibre-to-the-building, which have significant lengths of old copper lines involved, the lower speed tier might be all they have to choose from. Earlier this week, Telstra agreed to offer refunds to 42,000 customers after an ACCC investigation found they were sold higher speeds that could never be achieved.

The upside for the NBN is that retailers are starting to buy more wholesale capacity (called CVC) which should result in better performance for consumers during the evening peak demand.

CVC has risen from 1.09Mbps per user in June to 1.11Mbps per user for the last quarter.

“This is encouraging as provisioning adequate CVC is essential if [retailers] are to ensure households and businesses can get the speeds they are promised,” said ACCC chair Rod Sims.

“The ACCC’s current consultation proposing more detailed reporting by NBN Co should improve our understanding of CVC provisioning and use, particularly concerning times when congestion limits are reached.”

The watchdog also found that competition is healthy among NBN retailers, with more smaller players starting to carve out a market against the big players like Telstra, Optus, TPG and Vocus.

“Some of the small players are experiencing rapid growth and this shows promise for future competition. Direct connection will allow smaller retail service providers to have more control over their network in terms of how much CVC they provision,” Sims said.

The NBN is now supplying 3,038,483 broadband connections to its retailers, up 21% from the 2,511,392 in the June quarter.

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