The Australian economy is facing multiple ‘cliffs’ over the next six months: a fiscal cliff as emergency income support is withdrawn; a mortgage cliff as repayment deferrals expire; a rental cliff as moratoriums end; and an insolvency cliff as the deadline to allow companies to trade while insolvent expires.
Now you can add a National Broadband Network (NBN) bandwidth cliff into the mix:
NBN Co today announced a further extension of its 40 per cent additional wholesale Connectivity Virtual Circuit (CVC) capacity offer at no extra cost to internet retailers until 30 November 2020…
The 40 per cent additional capacity offer was introduced by NBN Co in March 2020 to support the nation’s additional data demands as more people relied on their home broadband connections for work, study and entertainment. Following feedback from internet retailers, NBN Co will extend the 40 per cent additional capacity offer (where available, depending on access technology) at no additional cost to participating retailers (based on the February 2020 baseline) until 30 November for bundled discount plans.
NBN Co is also extending its offer to increase the fair use thresholds for its standard Sky™ Muster satellite service to 90GB* of wholesale download data on average per user across a rolling 4 weekly period, depending on the services the retailer has ordered from nbn, until 30 November 2020. This offer, which came into effect at the end of March, adds 45GB* to the applicable fair use rolling 4 weekly threshold for each standard Sky Muster™ service at no additional cost to internet retailers.
Some ISPs like Aussie Broadband have already stated that they will raise prices after the temporary capacity increase from NBN Co expires:
Aussie Broadband believes that the telco industry will either have to increase prices or reduce service quality once NBN’s COVID CVC boost finishes, according to managing director Phillip Britt…
Aussie Broadband has seen its customers settle into a pattern of using about 10% more bandwidth than originally predicted pre-COVID, and believes this reflects “permanently changed behaviour”.
“Not surprisingly, people have become used to using their Internet for more things and on more devices – whether it be working and schooling from home, streaming entertainment or shopping online or anything else,” Britt said.
“NBN’s extra 40% CVC bandwidth to cope with peak demand during COVID certainly cushioned the impact, but once it’s gone, we don’t believe traffic levels will return to original forecasts even without areas of the country going in and out of lockdown…
According to Britt the retail market is so competitive that providers “have made a rod for their own back”.
“While usage continues to rise every year, and NBN still charges for bandwidth volume in the form of CVC, providers have little choice but to raise retail prices or reduce service levels,” Britt said.
“Even if NBN extends its COVID CVC offer, this is a band-aid solution to a deeper problem.
Thus, it appears NBN customers are facing price rises in the near future, which will further slice household disposable income.
