The Australian Competition and Consumer Commission (ACCC) is continuing its investigation into NBN affordability, announcing today it has launched an inquiry into wholesale NBN prices.
The inquiry will look at issues first publicly raised by the ACCC in April of this year – namely, if entry-level and basic NBN plans are actually affordable for lower-income Aussies migrating from ADSL connections. The ACCC’s deep dive will look at the wholesale prices paid by retail service providers (i.e. telcos such as Telstra, TPG, or iiNet, who supply and sell NBN plans to residential customers).
When NBN Co changed wholesale pricing for mid-tier and premium NBN plans in back in 2017, it created a gap in the market for simple NBN 12 and NBN 25 plans at basic and standard speeds. Many internet service providers have since decided to cut these entry-level plans from their NBN product range, forcing customers to upgrade to pricier options at NBN 50 speeds or higher. Dodo, iPrimus, and Exetel have all abandoned NBN 12 plans this year, while big names such as Telstra and Optus no longer offer any NBN service for less than $70 per month.
Essentially, if you’re about to move from ADSL to NBN, or just want a low-cost NBN option overall, you may be stuck paying more than anticipated. With most ADSL broadband plans priced from $50-60 per month, and NBN 12 plans generally starting from $50-$70 per month, a switch to the NBN frequently comes with a monthly price increase.
This price difference has been reflected in Canstar Blue’s research. A recent survey of broadband users conducted by Canstar Blue showed that, on average, NBN customers spend $77 per month on their plan, compared to $72 per month for ADSL and cable users. 40% of respondents to Canstar Blue’s survey pay more for their NBN plan than their previous connection, and 18% of NBN customers have considered ditching the service altogether for home wireless or similar alternatives.
ACCC: cracking down ahead of NBN completion
Understandably, the ACCC isn’t happy with the lack of low-speed and budget-friendly options for NBN customers. “We have concerns that NBN Co’s wholesale pricing has resulted in unfair outcomes for those consumers who have no need for, or do not want, higher speed plans,” ACCC Chair Rod Sims said.
“Most consumers have no choice but to migrate to the NBN if they want to keep their home service active, but are at risk of not being able to obtain a comparable NBN service at a similar price to their ADSL service.”
To address this, the ACCC’s inquiry will primarily focus on basic NBN 12 services, and assess whether regulation is required to make the move to the NBN more affordable for current ADSL customers. The inquiry will also look at additional fees charged by NBN Co, such as service transfer and reversal charges.
The ACCC will also look the uncertainty posed by NBN Co’s use of discounts, which are offered to retail service providers, but can be withdrawn with a notice period set by NBN Co itself. According to Mr Sims, the Commission is concerned that these temporary discounts may lead providers to take unnecessary risks that will be passed on to consumers, leading to higher prices and reduced product quality.
Overall, with the 2020 on the horizon and the NBN rollout approaching completion, the ACCC wants to ease the transition for new customers before it’s too late.
“Right now, we are approaching a peak period for NBN service activations and mandatory migrations. The window for many consumers to migrate to the NBN without losing their existing fixed line service is closing.” said Mr Sims.
“We are interested in what changes can be made quickly to promote competition and the interests of consumers, while allowing NBN Co the opportunity to grow its revenues, invest in its business and earn an appropriate rate of return.”
NBN 12 deals: where to find the lowest prices
If you’re on the hunt for a budget NBN plan, it’s not all bad news: there’s some great offers out there. If you’re looking for unlimited monthly data at Basic Evening Speeds (NBN 12), you may want to try provider Flip’s near-unbeatable NBN deal: unlimited NBN 12 for just $39.90 per month.
Flip is offering this limited-time price to the first 1,000 customers who jump on board, and only if you’re happy to pay for your first two months in advance. However, the plan is free from lock-in contracts or set-up fees, and comes with a typical evening speed of 10Mbps.
If you do miss out on Flip’s $39.90 offer – or instead want to sign up for a month-to-month plan without pre-paying – you can still jump on Flip’s standard NBN 12 plan for $49.90 per month, again with no setup fees. This plan also comes with Flip’s Price Beat Guarantee: find a cheaper standard NBN 12 plan with unlimited data, and Flip will beat it by 5%.
Aside from Flip, there’s several other NBN providers offering affordable basic service with unlimited monthly data. The following table shows a selection of published unlimited data Basic Evening Speed (NBN 12) plans on Canstar Blue’s database, listed in order of lowest monthly cost to highest, then by alphabetical order of providers. Use our comparison tool to see all plans available on Canstar Blue’s database. These are products with links to referral partners.