Windows Server 2012 Resource Centre
[ad] Windows Server 2012 redefines the server category, delivering hundreds of new features and enhancements spanning virtualization, networking, storage, user experience, cloud computing, automation, and more. Click here to visit our Windows Server 2012 Resource Centre with case studies, white papers and articles about Windows Server 2012.
Nokia Lumia Smartphones: Innovation's calling
[ad] Nokia Lumia with Windows Phone comes with unique camera technology, wireless charging and turn-by-turn navigation. Make every image picture perfect. See your city differently. Charge without wires. Click here to learn more.
Save up to $199 on Dell XPS 12 Ultrabooks: Power for your projects and passions.
[ad] This convertible Ultrabook™ delivers the speed and performance you expect from the XPS family in a sleek new design that's ready for work and play. Don't get two pieces of technology when one will do it all. The Dell XPS 12 is a tablet and Ultrabook combined to produce the perfect laptop.
Great articles on other sites
- $5.2m to put e-tax on Mac
- Galaxy S 4 “Google Edition” to be available in Australia via MobiCity
- When does mission creep become censorship?
- First NBN fibre extension completed
- Proof the internet filter lives on by other means
- Budget 2013: Heavy on 'showcasing', light on strategy
- CGU to replace core insurance system
- Google Australia calls for mandatory comp sci until year 10
- Spectrum fail could help Libs fight Labor's regional NBN
- Offended By Fraudband? Maybe You Shouldn’t Have Said It First
Managing virtualised environments: Free whitepaper
[ad] Virtualisation is one of the single most important technologies for efficiently operating servers. This free whitepaper presents information about current trends in virtualisation adoption, risks associated with single vendor virtualisation, and the benefits of open source virtualisation. Click here to download the whitepaper.
One More Thing - iOS App Maker Conference - 24th May
[ad] If you make iOS apps, come listen to the best in the industry share their tip & tricks for App Store success. Melbourne, 24th May, 2013 - use the coupon code "delimiter" for 5% off.
Blog, Telecommunications - Written by Renai LeMay on Friday, February 10, 2012 12:07 - 215 Comments
NBN pricing revisited: The ARPU argument
blog In well-regarded industry newsletter Communications Day this morning, publisher Grahame Lynch takes a potshot at Delimiter and our audience over recent articles attempting to correct inaccurate statements from the Coalition that broadband prices will rise under the National Broadband Network. He writes:
“In recent weeks Malcolm Turnbull has been engaged in a somewhat unseemly online dispute with an Internet website and its band of pro-NBN followers who are targeting him over what they allege are his inaccurate claims that the NBN will cause broadband prices to rise. They point to the initial round of NBN retail offers, which suggest the opposite.”
The full comments are available online here, buried deep in an otherwise innocuous commentary about Telstra’s half-yearly financial results yesterday. I encourage you to read them in full.
Now, leaving aside the lack of courtesy in not even naming Delimiter (yo, Grahame, what up, my man?), what Lynch goes on to argue is that NBN Co is intentionally keeping its wholesale prices down at the moment to ensure that retail NBN prices aren’t higher than current ADSL or HFC cable broadband pricing. He then goes on to point out that NBN Co’s business plan states that it expects the average revenue per user (ARPU) to eventually rise — from, as Lynch states, $23 in 2013 to $32 in 2015 and $52 by 2020. He writes: “There’s no arguing around it: the only point of an NBN is to provide a faster-than-today service but once you start using it beyond DSL- style speed and download levels you will pay more.”
Now, the first point is one which has been raised on Delimiter by other commenters previously, and you would think it would have some merit. But the difficulty is that NBN Co has committed to the ACCC that it will maintain wholesale prices to a reasonable level over the 30 year period governed by its Special Access Undertaking document. The document plainly states that NBN Co’s basic broadband pricing will remain the same until June 2017, and that after that point, price rises will be limited to half of consumer price index rises in any one year. They also can’t be accumulated over time.
In short, NBN Co has guaranteed long-term, affordable, price stability on its wholesale prices, which will ensure similar stability in the retail market. Lynch has not addressed this issue.
With respect to Lynch’s second comment about ARPU, I am unclear as to why he has included it. What NBN Co is essentially saying in its business case is that it expects consumers to use more and more broadband over the years, buying faster broadband services and consuming more data. This is, of course, true, and it will lead to NBN Co making more money from those consumers.
However, this does not mean that broadband prices in of themselves will consequently rise. It may mean that consumers will sign up to higher value plans. But those plans won’t cost comparatively more than they used to.
There is also evidence that in many cases, consumers won’t actually need to switch to higher value plans. For years, Australian broadband prices haven’t changed substantially. ISPs have not been cutting prices substantially. Instead, as iiNet CEO Michael Malone has pointed out, the focus has shifted to giving customers more value (quota, and extra services such as IP telephony) for the same cost. This has become possible due to factors such as the decreasing cost of international backhaul to Australia, among other factors.
Now, it might be possible for the Coalition to start arguing that new benchmarks will be set under the NBN for what an affordable broadband service might be. In 2012, most people are happy with ADSL2+ speeds (usually up to 16Mbps or so), and a few hundred gigabytes of quota per month. The Coalition could argue that in 2015, a basic broadband service might be faster, say 25Mbps or 50Mbps, with quota of 500GB a month. And that because people are switching to higher value plans to get such services, in real terms, broadband would be more expensive under the NBN.
However, this is not what the Coalition is currently arguing. And in any case, in an age where ISPs like iiNet are offering 100Mbps NBN plans with a terabyte of quota for $99.95 a month (the absolute top end option in a market which starts at a mere $34.95 a month) … I would strongly argue that even this argument wouldn’t hold water. In the NBN age, broadband is going to be highly affordable, as it is now.
Grahame Lynch is a respected telecommunications commentator and a professional colleague of mine with whom I have shared many an ale. But, like other commentators on the issue of NBN pricing, he hasn’t provided enough evidence to make his case that broadband prices will rise under the NBN. And what evidence he has provided is more in the line of speculation about what NBN Co’s business plan might mean in the long-term. Meanwhile, in the real world, ISPs like Exetel are still cutting their NBN prices.
That’s the reality of NBN pricing.
Leave a Comment
Blog, Enterprise IT - May 23, 2013 13:03 - 0 Comments
More In Enterprise IT
- Victoria abandons IT shared services?
Core CenITex services to be outsourced
- Australia gets two Windows Azure datacentres
- Oracle reveals swathe of Aussie rollouts
- Australia’s universities hacked on a regular basis
- 32 years later, CGU replaces insurance IT platform
News, Telecommunications - May 23, 2013 11:57 - 55 Comments
More In Telecommunications
- Telstra set for massive internal restructure
- iiNet sells TransACT’s FTTP to NBN Co
- At death’s door:
Vodafone loses 216k more customers
- 4G race: Telstra turns on 1500th tower
- Optus launches TD-LTE 4G trial in Canberra
Blog, Gadgets, Gaming - May 23, 2013 14:28 - 10 Comments
More In Gadgets
- Sony Xperia Z tablet hits Australia
- HP Slate 7 to land in Australia shortly
- Why touchscreens matter for laptops
(Or, review of the ThinkPad X1 Carbon Touch)
- Amazon Appstore challenging Google Play as Australian launch looms
- Consoles to suffer as tablets triple mobile games downloads by 2017