The NBN Co. backflipped over charging regional users more for wireless, just a day after floating the idea

  • An appearance before a parliamentary committee this week sparked concerns that the NBN Co. planned to charge $65 for bundled wireless services in regional areas.
  • The following day, Communications Minister Mitch Fifield was emphatic in saying ‘this will not occur’.
  • NBN Co. released its annual results yesterday with revenue ahead of target at $1.978bn, and the roll-out 75% complete.

The NBN Co. appears to have been pulled into line by Communications Minister Mitch Fifield over plans to charge regional customers more for wireless access to broadband than fixed line city customers.

The change of heart came less than a day after NBN Co CFO Stephen Rue told a joint standing committee hearing in Parliament this week that the future cost of bundled wireless technology to regional customers would cost $20 more per month than the $45 monthly wholesale charge for fixed line services in the cities.

The fixed wireless products roll out from Monday, August 20.

After Labor jumped on the revelation of a price difference, calling on the government to act, Senator Fifield responded saying the claim was not true and that it was simply part of ongoing consultation.

“Labor have claimed that NBN intends to charge more for fixed wireless services compared to fixed line services. This is not the case. This will not occur,” the minister said.

“NBN is embarking on a fresh round of product consultations but have made no decisions.

“NBN offers equivalent pricing on comparable fixed line and fixed wireless products. The Government will ensure that this continues.”

NBN Co chief executive Bill Morrow subsequently sought to clarify the issue, telling the ABC: “There is no $65 charge for a fixed wireless [50-megabit per second plan], that was a ‘consultation’ issue. It’s a minor point on there, it’s easy to just wipe off so there is no difference at that price point for fixed wireless compared to fixed line technologies.”

But during the committee hearings on Wednesday, the following exchange took place between Tasmanian Labor MP Brian Mitchell and Rue as they sought to clarify the NBN Co’s plans and charges.

Brian Mitchell: I want to be crystal clear: are you saying that, if somebody who lives in the centre of Hobart and is on a 50-meg bundled service and paying $45 wholesale moves out to my electorate and gets a fixed wireless tower, under the new bundled service you are talking about they would be paying $65 wholesale? Is that the essence of what you’re saying?

Stephen Rue: If the RSP chooses to purchase a 50-20 bundled product from us, that would be $65, yes. What the RSP then chooses to on-charge to the end user is a matter that I can’t comment on.

Mitchell: What is the bundled product for fixed line that you sell to the RSPs?

Rue: We’ll be selling a 50-20 bundled product for $45, which includes two-megabits-per-second inclusion and a 140 product with 2.5-megabits-per-second inclusion.

Mitchell: That confirms what Mr Jones has been saying — that, if somebody in the city on a fixed line service they are getting for $45 moves into the country and onto fixed wireless, they will be paying $65 wholesale. So it’s a price differential.

Rue: We are talking wholesale prices here.

The NBN Co. also tried to subsequently mitigate Rue’s comments by amending his opening statement on its website.

Initially published as the “Opening statement from NBN Co Chief Financial Officer Stephen Rue”, it’s now headlined as a statement “that captures his opening remarks at the Joint Standing Committee and includes additional detail for clarity”.

It now includes a line saying: “We are consulting on a ‘Max’ bundle at around the same price point. We hope these discussions can be concluded in around nine months’ time.”

The amendment was made the morning following Rue’s comments after Labor began agitating on the issue.

NBN Co. released the latest annual results yesterday with CEO Bill Morrow saying the company remained on track to finish building the network by 2020, with 75% already complete.

The business nearly doubled its revenue to $1.98 billion after active user numbers surged 65% to four million.

The figure is $78 million ahead of target. Operating expenses rose more than $300 million over the previous financial year to $2.081 billion. Average revenue per user also increased $1 to $44 in FY18.

The company posted an EBITDA loss of $2.051 billion, with the net loss after tax now standing at $4.78 billion.

Total assets sit at $28.2 billion.

The cost of fixed wireless connections increased $112 to $3,757 per premise during the financial year as technology was upgraded to tackle congestion problems that were slowing speeds.

But the NBN Co. is behind on some of its targets, with the cumulative premises ready for service at 8.1 million, nearly 600,000 behind the corporate plan figure of 8.7 million.

At 4.036 million, cumulative premises activated are more than 360,000 behind the corporate target of 4.4 million.

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