nbn has announced a move to a new discount model for its Connectivity Virtual Circuit (CVC) charge to drive greater price certainty for retailers, increase flexibility and enhance the experience for end users.
The new model, which comes into effect on 1 June 2017, calculates the discount based on individual retailer averages, as opposed to an industry average. It automatically reduces the price of CVC as the average amount of CVC per end user increases.
nbn Chief Customer Officer, John Simon, said, “This change is intended to deliver a number of benefits, including greater forward price certainty to retail service providers (RSPs), allowing them to better manage their cost base, and supporting growth in usage on the NBN network.
“It will also provide further scope for retailers to differentiate their offerings, which in turn will promote competition and assist consumers in accessing a wider choice of broadband plans.”
The new model is the next step in the evolution of the dimension based discount (DBD) pricing mechanism, which was introduced in June 2016 on an industry-average basis. It follows an extensive consultation period with nbn’s customers, the retailer service providers.
“Our aim is to achieve better outcomes for end users, RSPs and nbn by providing a more direct link between an individual retailer’s dimensioning and unit price,” Mr Simon said.
Feedback received during the consultation period with industry was broadly supportive of the new approach.
“We have worked closely with industry in order to make sure we are delivering a range of competitive broadband services for all Australians. Today’s announcement is another step in helping us create value and competition in the market,” Mr Simon said.
“We will continue to review our pricing structure to ensure it supports uptake and usage of the NBN network.”
The new model applies the discount on a monthly basis across all technologies, except satellite.