NBN Prices: Why Is Everyone Already Freaking Out?

NBN Prices: Why Is Everyone Already Freaking Out?

So Internode previewed its proposed NBN prices yesterday, and as I said then, it’s a possible view at how the competitive landscape may unfold. But Internode is just one medium ISP — and a premium priced one at that. So the ensuing cries of “NBN fail!” from Malcolm Turnbull and some quarters of the media are entirely way too premature.

UPDATE: Exetel’s 100Mbps NBN Starts At $50: Enter The Budget ISPs

I’m not naively looking at the situation with twinkling optic fibre stars in my eyes. I’ll be the first to cover it if NBN pricing proves to be pear-shaped. I’m simply saying let’s wait for all the information shall we? We haven’t heard from all the ISPs, so let’s take politics out of the equation and focus on the task at hand.

Here’s what we know. Internode recently adjusted its current ADSL2+ pricing plans. This included downgrading the $60 per month Easy Naked S plan from 150GB to 30GB for new customers. ADSL2+ has a theoretical maximum of 20-24Mbps a second, and depending on all sorts of variables, the actual line speed you receive is usually around 8-15Mbps.

A few days later, Internode unveiled those possible NBN prices. Its 12Mbps NBN plan with a 30GB limit costs $60 per month. That’s pretty much the same value as its ADSL2+ plan. Internode also said its 12Mbps/1TB data plan will cost $150 — the same as its current Easy Naked 1000 plan. All of Internode’s NBN plans also include a phone line and $10 of calls.

But what if you’re lucky enough to have a current ADSL2+ line speed of, say, 15Mbps — you’d potentially be losing speed with these plans, right? Internode’s 25Mbps/30GB NBN plan is $70. And unlike ADSL, the ACCC has come out and said that claimed NBN speeds have to be what the customer actually gets (despite the fact that Internode’s pricing table says that speeds are not necessarily indicative). So 25Mbps would be double the speed of most current ADSL2+ connections.

Internode’s 100Mbps NBN plans start at $100 per month for 30GB. At those speeds, it won’t take long for some users to go over quota, so there are high quota plans, too: the 100Mbps/300GB and 1TB plans will cost $140 and $190 a month, respectively. And as The Australian points out, Telstra’s current premium 100Mbps/500MB cable broadband costs $148 per month.

But before we all freak out, let’s step back and take a look. As it has done with currently ADSL2+ plans, Internode has basically taken out the mid-range option. There’s no huge surprise here. Nor am I surprised that Internode MD Simon Hackett is suggesting his planned prices could increase.

On his website, Malcolm Turnbull has responded to Internode’s pricing by writing that:

a) The NBN estimated a 12 mb/s plan would cost between $53-$58 a month with a 50GB bitcap. Internode has said their 12 mb/s plan will cost $59.95 with a 30GB bitcap.

b) The NBN estimated a 25 mb/s plan would cost between $62 and $68 with a 200 GB bitcap. Internode has said their 25 mb/s plan will cost $89.95 with a 200 GB bitcap – so 32 per cent higher than the high end of the NBN’s scale.

The maths are correct, but the spin isn’t. Internode’s pricing — one ISP — does not equal the entire competitive landscape of eventual NBN costs.

ITWire’s Alex Zaharov-Reutt also forgets this point. He argues that “The latest pricing coming out showing the NBN will have a “starting” price of $60 is a joke, an absolute disgrace and a monumental rip-off. Why? Well, we only need to look at TPG’s unlimited plan, offering unlimited data for $59.95 per month, as fast as your ADSL2+ line can go, inclusive of $30 of line rental. ”

Dear Alex: Internode ≠ NBN. But your comparison of TPG is a good one. Let’s wait for it to announce pricing! TPG’s $60/Unlimited ADSL2+ plan already bests Internode’s current offerings. It’s entirely possible that its NBN plans will, too! TPG has more subscribers than Internode, and TPG has a penchant for Filipino tech support. That’s why TPG got 80% in a recent consumer satisfaction survey, compared to Internode’s industry leading 92%. Internode is a premium service ISP.

As I’ve said before, the NBN will be home to cheap ISPs favouring low-monthly fees over Australian-based customer service; it’ll cater to premium providers guaranteeing bandwidth and local support; and big-name telcos will compete by bundling several services (like VoIP or pay TV) over the NBN.

Let’s keep that in mind. And let’s have all the pricing on the table before we freak out.