NBN chief executive Bill Morrow has hinted that a new 50Mbps product with sufficient capacity to avoid congestion during peak evening times could come be announced by Christmas.
The NBN has blamed retail internet providers for not buying sufficient wholesale capacity – called connectivity virtual circuit or CVC – to allow its customers to avoid congestion during peak periods.
The current economic model, although tweaked a couple of times, is still not enticing retailers to pay extra above the basic amount necessary, as they try to keep their own prices down for a “land grab” of new NBN customers.
The high cost of the NBN has also resulted in most Australians opting for the low-speed 12Mbps and 25Mbps tiers, which the national network believes contributes to its image problem and lower cost recovery.
Morrow, at a senate estimates hearing on last month, suggested his organisation might come up with a pricing solution to resolve both problems, which are currently being discussed with retailers.
“If we can do something to… have a far more attractive price that gives you a 50Mbps speed product, and we have some inclusive CVC that comes with that, now we’re talking,” he said.
“There will be an announcement before Christmas, I promise you, Senator.”
The capacity bundled into a possible new product would be sufficient for retailers to not worry about buying extra to handle peak hour congestion.
“It just gives [the retailers] a bit of safety and freedom that I know I can get customers on [to the NBN] and not get congestion at a busy hour.”
New pricing would take effect in the first half of next year, but with the NBN obliged to return a certain amount of money back to the government, Morrow warned any pricing changes would be “evolutionary”.
“We’d love for people to be on 50Mbps. We think the 50Mbps plan is a good one. We think it satisfies almost every application and need of households that are out there today.”