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Featured, News - Written by Renai LeMay on Monday, July 25, 2011 9:51 - 144 Comments
Undercutting Internode: Exetel reveals NBN prices
National ISP Exetel has published its first commercial prices for services on the National Broadband Network, significantly undercutting previous prices published by rival Internode, with the cheapest option starting at $34.50 a month and the most expensive topping out at $99.50.
Internode created furore last week when it became the first national broadband provider to publish its initial pricing plans for commercial services over the NBN, with the ISP offering a series of bundled plans with an included telephone line at prices ranging from $59.95 per month through to $189.95 for a top-end plan featuring 100Mbps speeds and a terabyte of download quota.
Consumer groups such as the Australian Communications Consumer Action Network have raised questions about NBN affordability, while Shadow Communications Minister Malcolm Turnbull claimed the release of Internode’s prices undercut the rationale for the NBN entirely, as well as the credibility of the NBN’s chief proponent, Communications Minister Stephen Conroy. The prices were welcomed by NBN Co, however, which described them as adding some “very good” options into the marketplace.
However, Exetel, which is a much smaller provider but was still one of the first ISPs to conduct trials over the fledgling NBN infrastructure, last week published new NBN plans which appeared to significantly undercut those of Internode.
For example, Exetel’s lowest end plan costs $34.50 per month and delivers 12Mbps speeds with 20GB of data quota, making it $25.45 cheaper than an Internode plan with the same speeds but 10GB of quota more. Higher speeds are also easily accessible at lower prices — for example, Internode will charge $119.95 for a 100Mbps plan with 200GB of quota, where Exetel will only charge $89.50.
The plans appear, however, to be moderately more expensive than Exetel’s current broadband pricing. Currently, Exetel customers using ADSL broadband services would pay $39.50 a month for a service with 200GB of quota and speeds of up to 24Mbps, for example, and $25 more for line rental on a telephone line, for a total of $64.50. A similar NBN plan would cost $79.50.
However, the NBN fibre infrastructure will offer customers significantly better latency than the existing ADSL infrastructure. In addition, it is expected to be more reliable than services provided over Telstra’s existing copper network, and churning between providers should entail no customer downtime.
Like Internode managing director Simon Hackett before him, Exetel chief executive John Linton doesn’t appear entirely happy with the pricing framework being used by NBN Co to offer wholesale services to ISPs.
“The Labor government has made a major issue in their litany of idiotic statements about the benefits of an ‘NBN2′ along the lines of “more speed at the same price of ADSL2″,” wrote Linton on his blog on Friday. “At ‘NBN2′s’ wholesale pricing today that simply isn’t going to happen … at least not from Exetel.”
“Why? Because the monthly port cost of the lowest speed fibre service and the ‘backhaul/CVC’ cost is higher than even Telstra Wholesale charge for an ADSL2 service … and is almost double the cost of an Optus ADSL2 service … and that the fibre cost is going to get much higher once the ‘trial phases’ end and the [points of interconnect] move to their planned 121 locations instead of, as they now are, in CBD major data centres.”
However, despite the pricing uncertainty, Exetel will send out invitation emails to its customers in early stage NBN rollout zones in NSW and Victoria, offering them a free NBN fibre plan install with no charges for using it until September 30th this year. The Exetel trial will allow customers to keep their existing ADSL service and use both the ADSL and the new fibre network side by side, while continuing to pay only for the ADSL service.
“On or before 30th September they select which service they would like to keep,” wrote Linton. “If they don’t want to continue with the fibre service then they are not charged for it to be removed and they simply go back to using their ADSL service at their contracted price per month.”
Linton added in a separate blog post on Saturday morning that he would have liked to have offered quite a different model of pricing for NBN customers — using a monthly flat charge plus a 20c per gigabyte usage model, with no charge for uploads. “But the ‘me tooism’ entrenched by the ADSL marketing processes was judged to be ‘a common sense too far’ for the current hysterical fibre environment,” the executive wrote.
Latest Delimiter 2.0 articles (subscriber content)
|It’s hard to imagine how things could have gone worse for Malcolm Turnbull in his first three months as Communications Minister. With the public rapidly turning on the Earl of Wentworth over his horribly unpopular new NBN policy, a growing perception that he’s stacking NBN Co with partisan staff and a lack of transparency verging on the hypocritical, it’s hard to find positives for the Earl of Wentworth from his initial period in office. Turnbull is truly fumbling the catch on both political and functional levels.|
|Politicians from Australia’s major parties need to stop issuing ludicrous blanket pardons for the intelligence community’s ongoing misdemeanours and start applying a basic modicum of transparency and accountability to this important national security function.|
|The independent pro-fibre National Broadband Network movement is doing a far better job of promoting Labor’s Fibre to the Premises-based NBN policy than Labor itself. When is Labor going to wake from its slumber and start supporting this scrappy but energetic grassroots network of activists?|
|Ziggy Switkowski's first substantial public appearance since being appointed NBN Co chief executive has starkly demonstrated just how different he is from his predecessor, Mike Quigley, and just how strictly he will adhere to the guidelines which his patron, Communications Minister Malcolm Turnbull, has set for him.|
|Australian technology companies have been virtually absent from the the nation’s public stockmarket over the past decade as the stigma of the dot com bust took its toll on investor confidence. But a clutch of new listings planned for the closing months of 2013 shows renewed interest in the sector and that local entrepreneurs are smelling money in the air once again.|
|NBN Co’s Strategic Review process gives the company an unmissable opportunity to re-evaluate the early decision to deploy its FTTP network primarily through Telstra’s underground ducts. The company and its new Coalition masters must now seriously consider deploying more fibre aerially on power poles in an effort to speed up its rollout substantially.|
|That moment which many Australian technologists fervently hoped for but never expected to see has come to pass: Simon Hackett has been appointed to the board of the National Broadband Network Company. But what questions should the Internode founder be asking NBN Co’s executive management team? Here’s five ideas to start with.|
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