NBN to offer retail providers discounts

04_NBN to offer retail providers discounts

By Lilly Vitorovich
(Australian Associated Press)

The company rolling out the national broadband network will offer pricing discounts to encourage service providers to buy more bandwidth.

NBN Co says retail service providers will get tiered discounts on the so-called connectively virtual circuit (CVC) that’s used to reserve bandwidth on the NBN.

“We know more bandwidth can mean a better broadband experience for homes and businesses, so we are excited to evolve our CVC pricing model for our retailers,” NBN chief executive Bill Morrow said.

The rise of streaming services such as Netflix, Presto and Stan has contributed to a near doubling in the average NBN usage to 125 gigabytes in April from 75 gigabytes in February 2015.

“We know increased usage has presented challenges to our retailers, and we have consulted with them on a new CVC pricing model that creates greater flexibility and opportunity for the industry – acknowledging that broadband use is expanding,” Mr Morrow said in a statement on Tuesday.

Telstra, the nation’s biggest telecom operator, wasn’t immediately available to comment on NBN’s new pricing model. Rival telco Optus declined to comment.

The new pricing model is calculated on the average CVC bandwidth assigned by retail providers to NBN customers.

The more CVC bandwidth allowed for each customer, the bigger the CVC pricing discount available.

The discount, calculated on a quarterly basis, will be available to all NBN wholesale customers but won’t apply to satellite services.

It will be introduced in June, run for up to two years and will be reviewed on an ongoing basis in conjunction with wholesale customers.

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