NBN consumers continue shift to higher speed plans

| May 21, 2019

More than 5.2 million Australian households are now connected to the NBN, with almost 60 per cent subscribed to higher speed plans, according to the ACCC’s latest quarterly Wholesale Market Indicators Report, released today.

The report shows that NBN residential broadband connections across Australia rose by 8.5 per cent in the March quarter, up from 4.8 million at the end of the previous three months.

“The NBN has now passed five million residential premises connected and using an NBN service, and more than half of those customers are on higher speed plans,” ACCC Chair Rod Sims said.

Higher speed services now represent 58.4 per cent of all NBN broadband connections, with more than three million subscribers on services of 50Mbps or above.

The report shows that the number of 50Mbps plans taken up by consumers has grown substantially, following the introduction of discount offers and wholesale bundled products by NBN Co.

More than 2.6 million 50Mbps services were connected at the end of March 2019 (or 50.4 per cent of connections), compared to only 159,000 consumers on 50Mbps plans (or 4.6 per cent of connections) in December 2017.

A large number of higher speed plans are likely being taken up by customers newly connected to the NBN, after migrating from ADSL and HFC, while other consumers are switching from the lower speed NBN plans.

Consistent with this increase in the number of services on higher speed plans, the number of consumers on the entry level 12Mbps speed plan has declined for the second quarter in a row.

There were still one million consumers on these plans at the end of March, although this number has declined by 200,000 over the past two quarters.

“Although the number of consumers on these plans has dropped, they still account for a significant number of NBN users,” Mr Sims said.

“We would be concerned if the options to acquire entry level plans declined, either through availability or higher prices. Indeed, we continue to have concerns about the impact of NBN pricing changes on affordability of entry level plans for those consumers who only require a basic service.”

Connectivity Virtual Circuit (CVC), which is the NBN bandwidth acquired by RSPs to provide data to their customers, increased slightly on a per user basis over the quarter from 1.65Mbps to 1.67Mbps.

RSPs’ market shares remained mostly stable during the December quarter, with smaller retailers slightly increasing their collective share from 6.6 per cent to 6.8 per cent – a rise of about 38,700 services.

There were at least seven access seeker groups acquiring NBN services directly from NBN Co at each of the 121 points of interconnect (POIs) and at least eight access seeker groups at 118 of the POIs.

“NBN access seekers are continuing to directly connect to the NBN at more POIs, including in regional areas,” Mr Sims said.