NBN Co overhauls wholesale pricing model for business products

NBN Co has changed its business-grade services’ wholesale pricing model, aiming to make them more competitive and flexible.

A new spend cap for the network builder’s high bandwidth business products will be introduced on 1 October to reduce monthly wholesale charges for NBN retailers. It will replace the NBN Business Ethernet product, and is set to launch later this year.

“NBN is well positioned to deliver business-grade services at competitive market prices to unlock further choice and competition for Australian business,” Ben Salmon, NBN Co general manager for product, sales and marketing for business, said.

“Today’s announcement demonstrates our ongoing commitment to adapt and optimise our products and pricing in order to keep up with market trends.”

The pricing will be varied based on the amount of bandwidth that is bought by NBN retailers each month, where the higher speed tiers will see the biggest reductions.

An NBN spokesperson said the company estimates that retailers would be able to save up to 70 percent on wholesale monthly charges, depending on the speed tiers purchased and whether extra service levels are purchased.

The new prices aim to help retailers sell plans targeted to medium and enterprise customers, specifically those whose employees number between 20 and more than 200.

“We’ve taken on board the feedback provided by a number of our retail service providers and have developed a new pricing model to enable those offering high-speed broadband, voice services and after hours care on the NBN access network to market their products at a more cost effective price for their business customers,” Salmon added.

Earlier this year NBN introduced a similar scheme for its residential products, moving from an industry-based discount model to a retailer-based model.

The new model, which rolled out in June, calculates the discount based on individual retailer averages, where the connectivity virtual circuit (CVC) charge gets reduced automatically as the average amount of CVC per end user increases.