Telcos fume over NBN Co’s ‘entirely inadequate’ relief credit for RSPs

Telcos fume over NBN Co’s ‘entirely inadequate’ relief credit for RSPs

Telstra and TPG Telecom, two of the largest NBN RSPs in the country, are not pleased.

Credit: NBN Co

At least two of Australia’s largest telcos are fuming over NBN Co’s pledge of $5.2 million in COVID-19 lockdown “relief credit” for retail service providers (RSPs), suggesting it falls well short of what retailers need. 

The National Broadband Network (NBN) builder brought in the measure to mitigate the increasing bandwidth costs resulting from recent COVID-19 lockdowns, saying it would offer a credit payment on a proportional basis to eligible retailers. 

NBN Co claimed the offer would reduce additional wholesale data overage costs brought on by an increase in usage during the peak evening hours while ensuring RSPs can maintain customers’ download speeds. 

However, Telstra and TPG Telecom, two of the largest NBN RSPs in the country, are not pleased. 

“NBN Co’s small one-off credit is insufficient,” a Telstra spokesperson told ARN. “It doesn’t ease the burden that retailers are carrying. 

“With millions of Australians still dealing with the impacts of COVID, we continue to see higher than normal demand for data in areas impacted by lockdowns. To meet this demand, we have increased the CVC [connectivity virtual circuit] capacity we buy from NBN Co as traffic has increased 30-40 [per cent]. 

“It is disappointing that in a time when we’re trying to support customers to stay safe, retailers are left having to pay more while NBN Co are reaping a financial benefit. 

“We need an approach to pricing that enables retailers to provide the data our customers need, when they need it, without retailers facing ever-increasing costs,” the spokesperson said.  

TPG Telecom external affairs general manager Tim McPhail, meanwhile, has suggested the relief measure doesn't come close to meeting the needs of RSPs. 

“The rebate is entirely inadequate and allows NBN to continue to benefit financially from increased NBN usage while Australians are in lockdown,” McPhail told ARN in a statement. 

“Let’s be very clear, NBN isn’t incurring any additional costs because of the increase in traffic during lockdown, yet they continue to send RSPs an overage bill. NBN needs to do the right thing and waive these additional overage charges until lockdowns are lifted. 

“Based on the outdated NBN pricing model, this lockdown has allowed the NBN to charge higher costs for NBN usage in a situation when its costs do not increase. This is something the government should be very concerned about. This situation again highlights why the CVC pricing model needs to be scrapped,” he added. 

Regardless of the relief measure, NBN Co declined to bring back last year’s additional 40 per cent free Connectivity Virtual Circuit (CVC) capacity boost, which lasted from March 2020 until January, despite pleas from retail service providers (RSP). 

The company said the return to the CVC boost was unnecessary because of its provision of additional data across most speed tiers and the introduction of national CVC pooling, which it claims makes procurement of CVC “more efficient”. 

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