This blog is totally independent, unpaid and has only three major objectives.
The first is to inform readers of news and happenings in the e-Health domain, both here in Australia and world-wide.
The second is to provide commentary on e-Health in Australia and to foster improvement where I can.
The third is to encourage discussion of the matters raised in the blog so hopefully readers can get a balanced view of what is really happening and what successes are being achieved.
Wednesday, June 01, 2022
There Is Certainly A Technology Lesson Here For Monopoly Tech. Providers!
The
company operating the National Broadband Network has claimed competition from
wireless services including Elon Musk’s Starlink is threatening the viability
of its business, as retail internet providers hit out at its plans to sharply
raise prices.
NBN Co’s plans to raise
prices surfaced this week in a redacted proposal to revise its special access
undertaking, which was released by the Australian Competition and Consumer
Commission (ACCC).
The framework determines
how much it can charge wholesale customers including Telstra, Optus and TPG
Telecom. The proposal was criticised by the ACCC, which claimed it would result
in a doubling of the cost of entry-tier internet plans over the next decade and
ongoing price rises until 2040.
In the redacted documents,
NBN blames the planned price increase on several factors, including competition
from companies that run low-earth orbit satellites - such as Elon Musk’s
Starlink - and the rise of 4G and 5G fixed wireless services from Telstra, TPG
and Optus. It said these competitive pressures meant it needed a sophisticated
pricing model to ensure it could recover its costs over time, or otherwise its
business might not be sustainable.
“A significant and growing source of competition in markets in which
NBN supplies residential services is from 4G, 5G, fixed wireless network and
low-earth orbit satellite operators that are expanding their footprint and
aggressively marketing their services as a substitute or alternative to a NBN
fixed line service,” it said in its submission.
“The extent of competition and substitution risk means that NBN
faces substantial revenue sufficiency risk. The consequence of this is that NBN
faces the risk of being unable to generate sufficient cashflows to sustain its
business and continue to invest in the network to meet its policy obligations
and the needs of end-users.”
In a strongly worded letter released on Wednesday, the nation’s
leading telcos slammed the NBN proposal as “unsatisfactory” and urged newly
appointed ACCC boss Gina Cass-Gottlieb to introduce an “access determination”,
which effectively hands control of pricing of a service to the ACCC.
“NBN Co’s wholesale prices will rise and increase every year
thereafter at a rate higher than inflation, thereby worsening household cost of
living pressures and making NBN high-speed broadband unaffordable for many
Australians,” the letter, signed by Telstra, TPG Telecom, Vocus, Aussie
Broadband and Optus, said.
“We believe
the long-term interests of end users are paramount. Current and future end
users should not be compelled to underwrite NBN Co’s inefficient historical
costs and subsidise its entry into adjacent competitive markets.”
But NBN Co has justified its proposal on a range of factors,
including increased competition. It predicts it will lose at least 263,000
customers this financial year to fixed wireless services, and at least 283,000
customers in fiscal year 2023.
Telstra is rapidly expanding its 5G network and has priced its home
internet offering at a lower rate to its NBN offering. TPG Telecom last week
revamped its 5G fixed wireless service offerings and now provides customers
across all its brands with lower prices than what it offers for NBN. It is
expected to more than double the fixed wireless footprint to 160,000 by the end
of the year.
Interesting that the NBN is saying the Elon Musk’s Starlink is
eating it lunch – but with a global, faster and more reliable service it is
hardly unexpected. Especially with the NBN charging at the rates it does for a
reasonably basic service.
NBN should have seen this coming years ago and trimmed its price and
upped its quality of service, It is a big bad competitive world out there.
This says nothing about the impact 5G wireless from Telstra etc.
will have in the next year or two.
We all should be able to have gigabyte speeds for $40-50 month real
soon now!
You can’t be in the tech business and not have a competitive offering
if you expect to survive!
Isn’t the essence of this that NBN has been cross-subsidising the backbone with retail costs, and starlink etc are disintermediating that? Or is that we’re now going to paying for the Lib’s subsidy to Murdoch for a generation? I feel as though there’s a lot more to this than meets the eye
NBN digging it's own grave while blaming others. Increased competition is normally a reason to reduce prices. The quickest way to loose customers is to increase prices when your competition is selling similar products for less. "..NBN blames the planned price increase on several factors, including competition from companies that run low-earth orbit satellites.."
Isn’t the essence of this that NBN has been cross-subsidising the backbone with retail costs, and starlink etc are disintermediating that? Or is that we’re now going to paying for the Lib’s subsidy to Murdoch for a generation? I feel as though there’s a lot more to this than meets the eye
ReplyDeleteNBN digging it's own grave while blaming others. Increased competition is normally a reason to reduce prices. The quickest way to loose customers is to increase prices when your competition is selling similar products for less.
ReplyDelete"..NBN blames the planned price increase on several factors, including competition from companies that run low-earth orbit satellites.."