CVC increase for NBN retailers

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The ACCC has highlighted significant increases in connectivity virtual circuit (CVC) following the release of its eighth quarterly National Broadband Network Wholesale Market Indicators Report for the period ending 31 December 2017.

According to the report, CVC increased by 37 per cent from 1.11 megabits per second (Mbps) to 1.52 Mbps per user since the September 2017 quarter.

In December 2017, nbn made retailers a temporary credit offer for acquiring 50 per cent more CVC per user.

It also made Access Virtual Circuit (AVC) at 50 Mbps available for the price of the 25Mbps.

ACCC Chairman, Rod Sims, said, “We are pleased to see such a large jump in the CVC acquired by retailers from nbn Co this quarter. With this level of CVC, consumers will have faster broadband speeds and hopefully less congestion during peak evening periods.

“nbn Co’s response to retailers’ concerns about CVC pricing seems to have had an impact on the amount of CVC being acquired which we believe will benefit consumers through better quality broadband.

“We hope nbn Co and retailers can continue to work together to ensure the level of CVC needed for a good customer experience is maintained.”

By the end of 2017, five access seekers were connected to all 121 points of interconnection (POIs), and other smaller players have also continued to increase their access in the last quarter.

“We’re pleased to note a fifth broadband provider is now connected to all 121 points of interconnect, with other smaller providers well on their way. This is great news for competition and, for Australian broadband customers, it means greater choice in which provider to connect with.”

The number of services connected to the NBN rose from just over three million to nearly 3.5 million in the December quarter, an increase by 14 per cent.

Telstra maintained its overall market share, accounting for 49.3 per cent of all wholesale services supplied over the NBN.

Its 55 per cent market share in regional areas compares to times before the NBN rollout when Telstra often had a share of well over 60 per cent.

Telstra’s current 43 per cent market share in metropolitan regions is similar to its traditional metropolitan market share.

Key points from the December report:

  • nbn Co was supplying a total of 3,467,306 wholesale broadband access services (up from 3,038,483 services in the September 2017 quarter)
  • Demand for network capacity continues to increase with nbn contracted to supply a total of 5,385 gigabits per second of CVC capacity (up from 3,452 in the September 2017 quarter)
  • The amount of CVC acquired per user increased to 1.52 megabits per second (up from 1.11 in the September 2017 quarter)
  • There are 27 access seeker groups directly connected to the NBN. Of these, five (Telstra, Optus, TPG Group, Vocus and Aussie Broadband) are connected at all 121 POIs
  • The most popular speed tier remains 25Mbps accounting for 54.3 per cent of services 

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