news National provider broadband provider TPG has revealed it is planning to offer at least one plan on the National Broadband Network’s fibre infrastructure featuring the same unlimited downloads it offers on ADSL networks, with speeds of 12Mbps and a monthly charge of $69.99 including a home telephone line.
The company is well-known for its unlimited broadband packages on its ADSL network, which typically cost around the $60 mark and feature unlimited monthly data quota and a bundled telephone line, but until now TPG has remained aloof from the race to sign up customers in the NBN’s early rollout zones.
However, in its annual financial results presentation pack this morning, TPG included a slide that featured a 12 month NBN plan at the entry-level 12Mbps speed with “unlimited data usage” for $69.99 per month, plus unlimited local and “standard national calls” to landlines and unlimited international calls to a number of countries globally. The company did not reveal whether it was planning to offer unlimited quota on higher-speed plans — such as 25Mbps, 50Mbps or 100Mbps — which would allow customers to download much higher levels of quota per month.
The news comes several months after TPG told iTNews in March that it was considering an unlimited quota plan. At the time, the publication reported: “TPG general manager of marketing and sales Craig Levy … said the company was “looking at all our options” for NBN pricing, including an unlimited quota plan, and was planning to compete heavily on the network.”
Along with Dodo and Vodafone, TPG is one of the few major Australian broadband providers not to have released any pricing details yet for National Broadband Network plans. In fact, it is unclear to what extent the company has actually engaged with NBN Co’s ‘on-boarding’ process, whereby ISPs work out how their systems will interconnect with the National Broadband Network.
It has been unclear whether TPG could maintain similar pricing levels on an NBN unlimited plan to its existing ADSL2+ unlimited plans. The maximum a user could theoretically download over a month through an unlimited ADSL2+ plan is around 6.3TB. However, with the dramatically faster speeds available under the NBN — up to 100Mbps, as opposed to up to 24Mbps under ADSL2+, that total monthly download limit could be quadrupled. That extra quota cost could potentially drive up monthly plan costs on unlimited plans. The maximum quota other ISPs are currently offering on their NBN plans is between one terabyte and two terabytes.
On a 12Mbps NBN plan, the maximum quota a user could download per month would be close to 3.1 Terabytes. TPG has described the unlimited quota plan as a “standard” plan.
If TPG does proceed with its unlimited pricing package, the company’s offering will be radically different from those NBN fibre pricing plans already in the market, with most other providers focusing on higher speed plans with a moderate amount of data quota. For $70 a month, for example, second-tier ISP Exetel offers a 300GB plan at 100Mbps speeds. This plan undercuts popular rivals such as iiNet and Internode.
It looks like TPG is finally convinced that the NBN is getting some scale and has started to show its hand on its NBN pricing. I guess we can’t be surprised that the company has tried its hardest to squeeze its extremely popular “unlimited” model into a fibre framework, but will the plans be popular? And are they actually good?
In a word, no.
Frankly, if you’re going to sign up to the NBN, as virtually every Australian will, and you’re the sort of person who downloads a lot of stuff from the Internet (hence, being interested in an unlimited quota plan), you are going to want to take advantage of the NBN’s faster speeds. To go from ADSL2+, which only offers speeds up to 24Mbps, and most people get far less, to fibre at 12Mbps is a bit of a joke. 12Mbps is not the NBN tier which most Australians are going to sign up for, and in fact NBN Co already has significant uptake figures showing that a higher than expected proportion of NBN customers sign up for the higher value plans — 50Mbps and 100Mbps.
But if TPG does offer unlimited quota value at these higher speed plans, it is going to have to push its charges much higher as well, just to keep up with customers’ downloads. At 25Mbps, for example, you can theoretically download about 6.7 terabytes of data per month, so it’s not unreasonable to expect that TPG might charge something similar to its current unlimited plans for such a service — perhaps $80 a month?
But as you get higher speeds, the amount of data you can such down a month increased rapidly. At 50Mbps, you could download a staggering 13.3 terabytes a month, and double that at 100Mbps. Consequently, TPG will not, in my estimation, be able to offer these plans at anywhere south of $100 — and the expensive, post-$100 customer has never been where TPG has aimed at.
I expect that TPG’s most popular NBN plan, if it chooses to offer one, will be a ~ $80 unlimited plan with 25Mbps speeds. That’s where I would say most TPG-type customers would be OK signing up for. Hell, maybe TPG can do some fiddling with its telephone costs and cut that down a bit to $70. Then it surely would have a winner on its hands. But I’m not sure how financially possible that is.
Image credit: TPG