iiNet pricing plans confirm that NBN will not bring cheaper broadband

“This morning’s release of NBN consumer pricing plans by iiNet confirms that Labor’s claims of cheaper broadband over the National Broadband Network are not being met,” Member for Bradfield, Paul Fletcher MP said.

Last year, Julia Gillard told the Parliament that NBN would offer cheaper prices.

‘Do you want families in your electorate to have the benefit of more competition, better broadband products and lower prices?  Then tick the National Broadband Network.’”

“I calculate that iiNet’s entry level naked DSL* product today costs around 70 cents per gigabyte – but its new entry level NBN product will cost $1.25 per gigabyte, or nearly 80 per cent more,” said Mr Fletcher, a former senior executive with telecommunications company Optus.

“This is no criticism of iiNet – they are in the hands of the wholesale pricing structure imposed by the government owned monopolist NBN Co.

“iiNet’s entry level NBN product will cost $49.95 a month, for speeds similar to today’s ADSL2+ broadband (12 megabits per second down and 1 megabit per second up) – with a download limit of 20 gigabytes in peak times and a further 20 gigabytes in offpeak times.

“Today,  iiNet’s entry level naked DSL* product costs $69.95 but offers download limits which are two and half times higher, at 50 gigabytes peak and a further 50 gigabytes off peak.

“It is also noteworthy that iiNet’s announcement – like similar recent announcements from Internode and Exetel – does not include a low priced voice only product.

“Telstra’s figures show that it has around 8.5 million ‘basic access’ lines – yet of those only 3.3 million are carrying broadband services.  In other words, around 5.2 million lines are voice only.

“Many voice only customers are not well off – but they need the phone to stay in contact.  Today they can use Telstra’s Homeline Budget, with a line rental charge of $22.95. But so far there has been no retail voice only pricing announced on the NBN.”

Mr Fletcher said it was clear from iiNet’s pricing that this major broadband retailer believes that consumers will not pay a significant premium for high speeds.

“They are charging $49.95 for the entry level 12 megabit per second service – and yet a 50 megabit per second service will cost only $15 more per month; and going from 50 to 100 megabits per second will incur only a further $5 per month charge,” said Mr Fletcher

“We keep being told that consumers are desperate for the high speeds that the NBN can deliver – but apparently an experienced retailer like iiNet does not think consumers will pay much of a premium for those speeds,” Mr Fletcher concluded.

*Note to editors 

“Naked DSL” is the broadband pricing option in today’s market under which the customer is not also required to take a voice service.   Under the pricing plans used by Telstra and some others in the market, the customer is typically required to first purchase a home voice telephony service (for which there is a monthly line rental charge) before being able to purchase a broadband service.  For example  Telstra’s BigPond Elite 50GB product is an ADSL2+ service with a 50 gigabyte per month download limit and will cost $49.95 a month on a 24 month contract;  however you must also have a Telstra voice service (“full service home phone”) for which the line rental costs a further $29.95 a month (Homeline Complete.)  By contrast, some of Telstra’s competitors including iiNet offer a ‘Naked DSL’ service under which the customer is not required to purchase line rental.  Therefore Naked DSL pricing is the best comparison to pricing being offered over the NBN.

Media Contact – Georgia-Kate Schubert 02 9465 3950 or 0414 210216