RIP Cheap NBN Plans: Get Ready For The Hard Sell

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As NBN Co is pressuring RSPs to funnel customers away from cheap 12Mbps plans, Australian Communications Consumer Action Network (ACCAN) has revealed telco customer service representatives are being encouraged to focus on selling over services.

So, we could be approaching a nexus of pushing people, who are potentially vulnerable and are looking for the lowest cost internet access rather than super-fast services, to higher cost services sold by companies increasingly focused on selling rather than serving customers.

ACCAN commissioned the Spotlight on Telco Commissions and Targets and found, through interviews with 30 former staff from Telstra, Optus and Vodafone, that financial incentive systems that are built around sales targets, at times at the expense of customer service and satisfaction.

Their findings suggest there is a broad industry push to focus on selling, up-selling and cross-selling related products or services like handsets or accessories. This sometimes resulted in consumers being exposed to questionable tactics from customer service representatives.

At the same time, NBN Co is removing the discounts they offer to RSPs on CVC (Connectivity Virtual Circuit). It's those discounts that help RSPs offer low cost plans with slower data rates. Because RSPs received a certain amount of CVC at a low cost, they were able to sell 12Mbps plans profitably. But those CVC discounts are disappearing, making low-cost, slower plans less palatable to RSPs.

It's also worth noting that 12Mbps is not broadband by any sane definition. And the ACCC counts 25Mbps plans as being low speed as well. They might be always-on internet access but they aren't broadband.

The discounted CVC was a short term measure that will disappear. And with over a million users on 12Mbps plans according to the ACCC, there will be a lot of people who will see their connection speeds eroded on cheap plans and, potentially, feel the need to upgrade to a 50Mbps or faster plan.

The ACCC notes that well over half of NBN connections are now on 50Mbps plans following an adjustment in how NBN charges RSPs for CVC at higher speed tiers.

With ACCAN putting the spotlight on some interesting sales tactics and changes in how market structures such as CVC pricing are applied, we'll see the final push for the remaining 12% of Australian homes not yet connected to the NBN, as well as the 1.1 million customers already on the NBN but accessing 12Mbps services, to be connected to faster plans.

Source: ACCC

The ACCC has already come down hard on RSPs that haven't met service obligations so this report from ACCAN has likely caught the regulator's eye.

One of the things that still has me worried is that the current push to get people on 50Mbps or faster services follows the launch of NBN Co’s Focus on 50 wholesale pricing offer. That was recently replaced with new wholesale bundle offers for 50Mbps and 100Mbps services to RSPs. It seems inevitable that an NBN Phase 2 will occur in the not-too-distant future in order to make faster internet access a reality. And that will need to be funded somehow.

Given NBN Co's mantra is to be offer services to RSPs at rates that encourage them to sell specific connection speeds, it's possible that the cost of plans we are on now will be altered in order to help fund future network development. That's not a fait accompli but looks like a possible scenario.

In the interactive tables below, we've put together some of the cheapest NBN plans that are currently available. Get 'em while you still can!

Cheapest NBN 25 plans

Cheapest NBN 12 plans


Comments

    This is a disappointing change. My Mum (80+ years old) is on the $40 Westnet 12mbps Seniors plan. That includes 50GB and phone calls for $40pm. I'd hate it but it's perfect for her. She really doesn't need to spend $60pm on her Internet and phone service. I'll have to switch her to some kind of cellular service if they take this plan away.

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