news One of the smaller players in Australia’s broadband marketplace has launched a range of innovative National Broadband Network pricing plans, including a top-end 100Mbps plan with 2TB of monthly quota and for $104.95, and a low-end plan which would cost customers as little as $29.95 per month.

SkyMesh has historically focused on providing broadband in areas where traditional ADSL or cable fixed broadband is not available, using technologies such as satellite and wireless. However, with the rollout of the NBN, the ISP has also launched a wide range of broader NBN plans in competition with major players such as Optus, iiNet, Internode and Primus.

SkyMesh’s NBN fibre plans span the whole spectrum — ranging both below most of the major players in price, but also allocating higher download quotas at the top end than are being offered by any of the other larger ISPs.

For example, at the top end, SkyMesh is offering two terabyte plans, where other companies such as Internode and iiNet have plans which max out at one terabyte. SkyMesh’s top-end 100Mbps plan, for example, comes with one terabyte of on- and another terabyte of off-peak data for $114.95 per month. An addition $10 per month will come off that cost if customers also sign up for a bundled telephone line.

One option which may be attractive to many customers is an option to cut that price down evern further by switching to a lower-speed 50Mbps plan (but still at least double the speed of today’s ADSL2+ networks), which cuts a further $10 off the monthly cost but still comes with the same 2TB of download quota. SkyMesh is also offering a range of other download quotas ranging from 20GB a month upwards, and a range of other speeds starting at 12Mbps.

The company’s bottom-end plan costs just $29.95 a month (or $19.95 a month if a customer also takes a phone line). It comes with 5GB of on-peak and 10GB of off-peak data, with speeds of 12Mbps. That plan is cheaper than the previously cheapest known NBN plan available through Exetel, which costs $35 a month, but comes with a higher amount of quota (50GB) at the same 12Mbps speeds. In general, SkyMesh’s plans are comparable, and in many cases better, than existing ADSL pricing. In addition, the technology underpinning the NBN is much more technically capable than ADSL or HFC cable broadband.

The news comes as Shadow Communications Minister Malcolm Turnbull has recently continued to argue that end user prices will rise over the NBN over time, despite evidence that current prices on the NBN are comparable to existing ADSL or HFC broadband prices. Turnbull has argued that this is due to the NBN’s monopolistic position in the market.

“A monopoly will always have the ability to charge higher prices than a business which is operating in a competitive market,” Turnbull wrote several weeks ago in an article on the subject.

“With barely 4000 users connected to the NBN after four years of Labor Government, NBN Co yet to report that it has earned revenue from selling broadband services, and completion of the rollout a decade away at best, claims and counterclaims about NBN pricing are at present entirely in the realm of theory. That is as true of the rate cards announced by various ISPs as any other indicator – we all know those rates can change.”

SkyMesh’s plans have also been raised in Federal Parliament last week as an indication of affordable consumer pricing on the NBN.

“Today tere are 28 active fibre and satellite service providers offering over 130 price points,” said NBN Co Mike Quigley in a Senate Estimates session (Hansard PDF). “This month Exetel reduced pricing by around 25 percent, to make its NBN plans among the cheapest in the market, and SkyMesh, which is currently a leading satellite reseller, is now also offering NBN fibre services and they have some 33 price points across five speed tiers.”

Communications Minister Stephen Conroy asked Quigley: “Do not be shy. What this their cheapest price?” Quigley replied: “SkyMesh’s cheapest price is now $29.” “29 dollars a month. Amazing!” said Conroy. “Those priced keep going up. No, they seem to be going down, sorry.”

However, not everybody was impressed by SkyMesh’s prices, with Liberal Senator Ian MacDonald (a long-term critic of the NBN policy) confirming that the ISP was paying NBN Co a base wholesale access price of $24 a month. “So they are making five bucks a month? I am glad I do not have shares in that company,” he said.

opinion/analysis
Like MacDonald, I don’t think SkyMesh can be making much profit on a $29 monthly plan, but that’s not the point. The point is that that is the cost which it will take to get entry level consumers onto the NBN. And that cost is minimal — directly comparable to entry level NBN plans today. Doubtless, SkyMesh is planning for many of those consumers to gradually migrate to higher value plans when they see the value of the infrastructure — and I have no doubt that that will happen.

It is also encouraging to see higher quota plans. As I have previously written, much of the current NBN pricing structures are based on the previous ADSL pricing plans — with dated quota amounts and shaping speeds not appropriate in a world of ubiquitous fibre to the home. It is great to see some thinking outside the box for the high-end broadband users.

Related posts:

1. Exetel reveals 300GB, 100Mbps NBN plan for $70
2. Optus launches small business NBN plans
3. TPG considering unlimited NBN plan
4. Telstra revamp features 500GB broadband plan
5. Internode launches NBN wireless, reveals pricing

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1. Michael Wyres
   Posted 22/02/2012 at 3:34 pm | Permalink | Reply

   Down down, prices are down.

   • crenn
     Posted 23/02/2012 at 12:22 pm | Permalink | Reply

     Oh bugger…. not that awful coles song….

2. Simon
   Posted 22/02/2012 at 3:38 pm | Permalink | Reply

   “So they are making five bucks a month? I am glad I do not have shared in that company,”

   This seems to be really pulling at strings… Complaining because it’s too cheap now!

   • Hubert Cumberdale
     Posted 22/02/2012 at 4:30 pm | Permalink | Reply

     We’ll at least it’s clear now the coalition doesn’t really give a shit about the taxpayers or consumers after all.

   • Alex
     Posted 22/02/2012 at 4:49 pm | Permalink | Reply

     Indeed Simon and therein lies the difference in logic between the NBN and the opposition’s alternative.

     The NBN is proving to provide exactly as Quigley and Co have projected (so far anyway) the same or better product for same or better price. The balancing act of 7% ROI and affordability is becoming obvious. This is a glaring example of how it can work.

     Perhaps this gives their other much critiqued projections, more cred too?

     Yet rather than rejoice in cheaper products for battling Aussies as you expect most rational people to do, the good Senator takes his bat and ball and trundles out the greed mentality.

     Seems he has just admitted that he (his party) supports high broadband prices for all Aussies (including battlers) and promotes a much larger ROI for the private sector owners of their broadband policy, all in the name of wooing those more financially able to invest in these companies, to get richer!

     On a side issue, forgive my lack of knowledge here, but I have never even heard of SkyMesh to be honest. Still early days I know, but so much for no NBN competition (didn’t Vodafone – normally just mobile seller also throw their hat in the NBN ring a while back) and only the biggies will offer products, claims from the NBN critics.

   • djos
     Posted 17/05/2012 at 2:27 pm | Permalink | Reply

     More proof that the only Aussies the Libs care about looking after are their mates in big business!

3. BigMuz
   Posted 22/02/2012 at 4:04 pm | Permalink | Reply

   Its worth noting that (afaik) Skymesh are also the first to publish NBN Wireless plans, the top tier being 500GB/500GB for $79.95 month.

   http://skymesh.com.au/plans/nbn-wireless.php

   This answers one of the questions I have had for some time about NBN Wireless, whether we were actually going to see high quota NBN Wireless plans for comparable prices to fibre.

   I still have some outstanding questions on NBN Wireless, that as yet NBNCo still haven’t answered for me – perhaps you could chase up NBNCo on the following Renai?

   1) Can a premises have more than 1 NBN Wireless connection (ie one for home office, one for family) – NBN fibre offers 4 connections, wireless only offers 1 – so will a single premise be able to get 2 seperate NBN wireless antennas/modems?

   2) Is NBN Wireless going to actually be speed restricted to 12/1, or is that just a guide figure they are quoting (LTE capable of so much more than 12/1, especially on the upload)

   3) Will there be any plans other than 12/1 on NBN Wireless – such as 12/4, which was originally discussed, but hasn’t been mentioned since Ericsson contract was signed.

   • Aaron (SkyMesh)
     Posted 22/02/2012 at 5:46 pm | Permalink | Reply

     Hi BigMuz, in answer to your questions:

     1) Actually the Wireless NTD has four UNI-D ports just like the Fibre NTD. It will be possible for a premises to receive four NBN Wireless services.

     2) NBN Wireless will initially be offered as 12/1 Mbps and then later as 25/5 Mbps.

     3) NBN Co will supply AVCs as shown above. It’s up to each RSP to decide what plans they offer.

     • BigMuz
       Posted 22/02/2012 at 5:58 pm | Permalink | Reply

       Thanks Aaron!

       I have been chasing answers to those questions for some time, so appreciate your post!

4. Jonathan
   Posted 22/02/2012 at 4:23 pm | Permalink | Reply

   Apparently the coalition, in pushing the “NBNco will lift prices!” angle, fail to understand the concept of Value Add / Up-sell.

   (That 29.99 plan is excellent value! but you know what is even better value? double your data limit for just $10 more!)

   It seems to me that there are plenty of ways to entice consumers to give more money to nbnco without using a “we are a monopoly now, your charges have been doubled!” business strategy

   • Noddy
     Posted 22/02/2012 at 4:45 pm | Permalink | Reply

     There is not much profit on a $29.99 plan, but it’s a profit. If they don’t offer the plan someone else will and get it instead.

5. Hubert Cumberdale
   Posted 22/02/2012 at 4:32 pm | Permalink | Reply

   I’m just wondering how “artificially” low can these ISPs go :-)

   • Noddy
     Posted 22/02/2012 at 4:52 pm | Permalink | Reply

     I can see them offering even more offpeak capacity. That will use up overnight capacity out of peak hour, why not, the CVC has been paid for 24 hour use. That will get the leechers in. Maybe a leecher special account. 100G peak, 3TB offpeak, keep them from clogging up peak times.

     • Aaron (SkyMesh)
       Posted 22/02/2012 at 6:19 pm | Permalink | Reply

       This is exactly what we have done in the past for customers with IPSTAR and NBN Second Release Satellite Services. We call them Night Owl Plans and we’ll certainly look at providing something similar for customers with NBN Wireless and Fibre services.

       • Noddy
         Posted 22/02/2012 at 8:26 pm | Permalink | Reply

         Just don’t make offpeak start at 12pm. I was with Netspace who were one of the first to do on/off peak. They quickly moved new accounts to 2am for offpeak. Midnight would hit and everything would grind to a halt as all the download managers fired up.

         • Paul Rees
           Posted 23/02/2012 at 7:56 am | Permalink | Reply

           Hi Noddy, the reason we have our NightOwl Plans start at midnight is that around 11:00 pm our customers’ bandwidth usage drops off significantly. By the time our NightOwl customers start their download managers, there’s still heaps of bandwidth for them and for other customers that are browsing and watching YouTube videos. We actually have way more bandwidth between midnight and 7:00 am than our NightOwl customers could possibly use. We’d like to sell way more NightOwl Plans than we do now, and we’ll tweak that by increasing the off peak component and adjusting the prices, but not by changing the midnight start. Thanks, Paul

           • Noddy
             Posted 23/02/2012 at 10:31 am | Permalink | Reply

             Ahh ok, that’s good. I just remember with Netspace there was a huge hit just as peak/off peak swapped over. Way more of a hit than peak time. 8pm would drop to like 600KBps Midnight would just almost halt things, pages timeout, downloads fail, games disconnect, took 15 minutes to settle. I guess that depends on your your available bandwidth and customer mix.

6. poedgirl
   Posted 22/02/2012 at 7:27 pm | Permalink | Reply

   How exactly do you bundle your home phone with them on the NBN? In order to get the $105 price, you need to bundle your home phone. This is something that will be removed once the NBN is live. To me this makes no sense, unless they mean you need to bundle an additional VoIP account with it?

7. Noddy
   Posted 22/02/2012 at 8:30 pm | Permalink | Reply

   I guess they may move to using the UNI-V port once telephony is available. VOIP without priority can get a little yuck.

   • Paul Rees
     Posted 22/02/2012 at 11:11 pm | Permalink | Reply

     Hi Noddy,

     Yes, we will move to the UNI-V port once it’s been upgraded and we’ve completed certification. In the meantime we loan the customer a VoIP adapter at no cost to them. Once the UNI-V port is supported, we’ll ask customer to plug directly into one of the UNI-V ports and return the VoIP adapter at our cost.

     We have just under 100 customers using VoIP on NBN Fibre and they tell us that the quality is brilliant, even better than a traditional phone call on a copper landline. The VoIP priority is handled by the VoIP adapter, and even if a customer is heavily using their Fibre service, the call quality is unaffected.

     Thanks, Paul

     • Noddy
       Posted 23/02/2012 at 12:18 am | Permalink | Reply

       Oh, that’s good. I assumed all VOIP would be data priority on the UNI-D port. I knew on DSLAMs you could set the priority by IP and have the ISPs VOIP held at high priority. The rest had priority reset to standard. I didn’t know if you could do the same for NBN CVC. I guess the FAN has similar capabilities to a DSLAM?

8. Not sure
   Posted 22/02/2012 at 10:05 pm | Permalink | Reply

   Hard to get excited when the service is not available!

9. Paul Rees
   Posted 22/02/2012 at 11:04 pm | Permalink | Reply

   Hi poedgirl,

   “To me this makes no sense, unless they mean you need to bundle an additional VoIP account with it?”

   We have found that when customers first connect to a SkyMesh NBN Fibre service it’s a bit of an unknown, so they prefer to leave their landline in place. SkyMesh offers customers the ability to bundle their existing landline and their broadband service and save $10. Just to be clear, they are still paying $29.95 per month for their landline, but they save $10 on the price of their broadband service by bundling.

   So if they are on the basic $29.95 broadband Plan, that’s bundled as $19.95 plus the $29.95 landline rental. As you say, it makes no sense to keep a landline when you can use VoIP over fibre, so we give customers the option to try VoIP on their Fibre service with no obligation, no contract and no equipment to buy. If they are happy with the quality of the calls, and they always are because the quality is brilliant, they can “port” their existing phone number to their VoIP service. Then, instead of paying $29.95 for their landline, they pay $10 for their VoIP service. Calls to any landline in Australia are just 10 cents untimed.

   We don’t offer a bundled price for NBN Fibre and VoIP, but if you take the basic Fibre Plan of $29.95 and the VoIP at $10, that’s a total of $39.95, and that’s just $10 more than most people are paying for their landline.

   I hope that makes sense. Thanks, Paul

10. Abel Adamski
    Posted 23/02/2012 at 7:08 am | Permalink | Reply

    Paul and Aaron, Thank you for your input from the horse’s mouth, it is good to have the relevant factual information and reasoning without the Posturing and Political game playing

    • Paul Rees
      Posted 23/02/2012 at 7:49 am | Permalink | Reply

      Thanks for that feedback, Abel. We’re not politicians so we can’t help with the posturing and game playing, but we can share our product information and commercial realities of the National Broadband Network. We’ve never been able to match the large players in ADSL services because we couldn’t justify the high cost of doing business with Telstra and installing our own DSLAMs at Telstra exchanges to get decent pricing. But with NBN Co, the playing field is level, there are no quantity breaks, we can buy at the same price as the larger players and that creates competition and it’s great for the consumer. Oops, I may have strayed into the area of political commentary. :-) Thanks, Paul

      • Brad Allen
        Posted 23/02/2012 at 10:05 pm | Permalink | Reply

        Wow, it’s refreshing to hear a comment like this from one of the smaller players in the market. Thanks for the insight Paul! I wish Turnbull was somehow able to hear these sorts of comments from ISP’s.

11. Abel Adamski
    Posted 23/02/2012 at 7:30 am | Permalink | Reply

    Not Sure, Pity but looks like the Luddite Colonial administrators will have the control and power they lust after sooner than later, all bets will be off and they will make sure there can be no competition to Foxtel and Sky. By the time they flog what has been done off to the private sector and they require their 25% ROI, pay their higher management costs and higher costs of borrowing. The Turnbull and Abbots claims of being more expensive will come true, they will make sure of that. They have to or be shown up as the posturing liars they are

12. Brad
    Posted 23/02/2012 at 7:34 am | Permalink | Reply

    They’d have to be really skimping on CVC charges wouldn’t they?

    • Paul Rees
      Posted 23/02/2012 at 7:43 am | Permalink | Reply

      Hi Brad,

      Quite the contrary. After paying thousands of Dollars per Mbps per month for satellite bandwidth on previous generation satellite services for our 30,000 satellite customers, NBN Co bandwidth for fibre, satellite and wireless is cheap. There’s no reason to skimp on IP Transit (Internet) or CVC or backhaul, it’s a minor cost compared to the AVC, and that’s reflected in the data allowances on the higher costs Plans. We currently make around $5 per (traditional) satellite customer per month, so the $29.95 Plan isn’t a huge shock to our bottom line. In any case, most of our customers on NBN fibre services aren’t choosing the basic Plan. As Johnathan said, “double your data limit for just $10 more!”, and he’s right. Thanks, Paul

      • Brad
        Posted 23/02/2012 at 5:24 pm | Permalink | Reply

        Thanks for the detailed response Paul, appreciated.

13. Abel Adamski
    Posted 23/02/2012 at 10:03 am | Permalink | Reply

    Renai, I seem to have problems with Delimiter and some other sites
    “The connection has timed out
    The server at delimiter.com.au is taking too long to respond.”
    I will admit I am on adsl2+ which is pretty unreliable and whilst the VOIP is brilliant while up, drops out too often during long calls or after spending 30 mins waiting in the call centre que. Using a Belkin ADSL2+ +dedicated Voip ports
    Wonder if you can enlighten??

14. Vitman
    Posted 23/02/2012 at 11:40 am | Permalink | Reply

    So its really an artificial 2TB plan then 1 TB on peak and 1 TB off peak.

    • Michael Wyres
      Posted 23/02/2012 at 11:58 am | Permalink | Reply

      1TB + 1TB = 2TB

      • Vitman
        Posted 23/02/2012 at 12:08 pm | Permalink | Reply

        At different times zone still.
        ISP’s should be more honest with their plans sure they call it a 2tb plan when its really restricted to on off peak times.

        Compared to say 2tb without the on and off peak time zones use 24×7 I would call it a real pure 2 tb plan
        With on and off peak times zones I would call it 1tb on peak and 1tb off peak times or call it the 1000/1000 mb plan and market it for what it really is.

        • Paul Rees (SkyMesh)
          Posted 23/02/2012 at 12:26 pm | Permalink | Reply

          Hi Vitman,

          I’m not sure if you’re taking issue with Renai calling it a 2TB Plan or if you were lumping SkyMesh in with other ISPs, but I should point out that we have never referred to that Plan as a 2TB Plan. We honestly refer to it as a Plan that has 1TB that can be used “at any time” and another 1TB that can only be used between midnight and 7:00 am in your local time zone. We do exactly what you are suggesting ISPs should do because we agree that that’s the honest thing to do. Thanks, Paul

    • Aaron (SkyMesh)
      Posted 23/02/2012 at 12:26 pm | Permalink | Reply

      Hi Vitman, we don’t structure our plans quite the way you have suggested. All SkyMesh NBN Plans include a Normal Data Allowance and a Bonus Data Allowance. Normal Data can be used at any time of the day or night (some call this ‘anytime’ data) whereas Bonus Data is available for use during Off Peak hours. More details are at http://forums.whirlpool.net.au/forum-replies.cfm?t=1857432&p=17#r324

15. socrates
    Posted 23/02/2012 at 12:01 pm | Permalink | Reply

    Of course Malcolm Turnbull is right: ‘NBN prices will rise over time.’

    In just twenty or thirty years time, the charges could be double what they are now.

    But before you fire off another press release, Malcolm, try to remember that it is the cost in real terms that matters, not the nominal dollars. All the indications continue to suggest that NBN charges, like most other technology costs, will decline in real terms over time.

16. Kevin
    Posted 23/02/2012 at 12:49 pm | Permalink | Reply

    Hurry up bring NBN into my area and I would jump the bandwagon…..

    I am stuck with ADSL2+ actual speed at 5Mbps in my area due to long distance to exchange.

17. not same
    Posted 23/02/2012 at 1:18 pm | Permalink | Reply

    30+29$ = 59$ a month for 15gig data + line rental sounds like scam to me.

    • Jonathan
      Posted 23/02/2012 at 3:04 pm | Permalink | Reply

      Not same,
      Read the other posts: The landline isn’t compulsory but offered for those who do not trust VoIP.
      also, the bundle drops the price of the plan by $10, so $29.95 + $19.95 (29.95 – bundle discount0 = $49.90
      The other alternative is 39 with a $10 VoIP addon if I am reading Paul Rees’ post correctly
      Because telstra doen’t DO cheap line rental :)

18. LBW
    Posted 23/02/2012 at 3:38 pm | Permalink | Reply

    MPs can’t count.

    Wholesale price is $24 ex GST. Skymesh price is $29 inc GST. Total margin $2.50 before CVC and connectivity costs.

    Total overall margin -$5 more likely.

    • Not sure
      Posted 23/02/2012 at 10:58 pm | Permalink | Reply

      Slim margins to maintain the ISP infrastructure, pay wages, and buy the new boat.