Embattled NBN slashing wholesale prices

March 20, 2018 Off By amlan

The embattled National Broadband Network is slashing wholesale prices in a desperate move to restore public confidence and encourage customers to upgrade to faster internet speeds.

Complaints over service drop outs, slow speeds and high prices have dogged NBN Co. In turn, it’s blamed service providers such as Telstra and Optus for not buying enough bandwidth, which has forced speeds to plunge at peak times.

So as part of this new wholesale deal, the ISPs will be forced to buy more bandwidth to help unclog the bottlenecks. The bottom line, it hopes, will be plans that make it cheaper for customers to sign up to the fastest connection speeds.

“A lot of people are choosing slower speed plans,” says NBN Co’s Philippa Perry.

“We want to see them boosted up to faster speed plans so we can really get them to experience the benefits of the NBN network.”

Speeds have plunged during peak times for the NBN, with the company blaming Telstra and Optus for not buying enough bandwidth (9NEWS)Speeds have plunged during peak times for the NBN, with the company blaming Telstra and Optus for not buying enough bandwidth (9NEWS)

NBN sells connection plans directly to telcos who then on-sell them to customers.

Under this new deal, a 50mbs wholesale plan would drop by 27 percent, from $61 to $45 while a 100mbs plan falls 10 percent from $72 to $65

Broadband customers would, of course, pay more than that.

NBN Co is hoping to make plans cheaper for customers signing up to the fastest connection speeds (9NEWS)NBN Co is hoping to make plans cheaper for customers signing up to the fastest connection speeds (9NEWS)

Technology expert Charlie Brown says the discounting move is long overdue.

“Eighty percent of Australians subscribe to the 25mbs speed or lower and they are the people who are complaining about the network dropouts and slow speeds. So, one fix for that is to make the faster speeds cheaper,” he said.

But he says this should be just the start.

“I think the NBN actually needs to do more to bring prices down to encourage Australians to subscribe to higher speeds.”

When asked how much cheaper, he said 20 percent.

NBN Co has also accused ISPs of a land grab mentality – attracting as many customers as possible by signing them to slower speed plans.

“We believe people will see the need for faster speed packages over the NBN, and we think they’ll see the opportunities that come with that as well,” Philippa Perry said.

While telcos will get the discounts, in reality there’s nothing to force them to pass those discounts onto internet users.

Technology expert Charlie Brown says the discounting move is long overdue (9NEWS)Technology expert Charlie Brown says the discounting move is long overdue (9NEWS)

Mr Brown believes they will be encouraged to be more competitive in coming months.

“Now, if your ISP doesn’t integrate better prices because of these changes, it’s up to you to shop around,” he said.

3.3 million Australians have already connected to the NBN while another 6.5 million have access to it but are yet to connect.

NBN Co expects cheaper deals to start being offered to customers over the summer.