Technology

NBN: Why they won't provide cheaper entry-level broadband

NBN: Why they won't provide cheaper entry-level broadband
NBN Co has revealed why it is not planning to introduce a cheaper entry-level broadband, citing fears it would affect long-term revenue and cash flow.
It's the first-time executives have gone on the record to explain why they continue to oppose the introduction of more specific affordable, entry-level internet services.
NBN chief customer officer for residential Brad Whitcomb said introducing a new entry-level plan, which the government defines as a basic 12/1Mbps service with unlimited data for $60 a month, would hinder the company's multi-year effort to step users up to higher speed services.
NBN Co doesn't want to offer cheaper plans to customers. (Nine)
"It would tend to drive more customers down into that much lower speed tier," he said in senate estimates hearing.
"To the extent that the entry level price gets pulled down and the economics become more attractive to retailers, more people would tend to find themselves there. 
"The awareness around the impact of not having the right speed is limited across the market so you're relying on a consumer group that might not be fully aware of the implications. 
"They could take up lower speed tiers, they won't get the experience that they want, it doesn't unleash the network that we've built."
Mr Whitcombe suggested the slower speeds would be detrimental to households requiring more bandwidth.
"When you start talking about entertainment or multiple devices, kids doing their homework etc typically that requires a higher speed tier than a 12/1," he said.
NBN Co chief executive Stephen Rue defended the current pricing structure, echoing the sentiment regarding the long-term future of the service.
"We set what we thought was a fair pricing outcome with the industry following many, many months of consultation, and a disturbance of that would have a detrimental impact - I think - on consumers long-term," he said.
"It is absolutely in the long-term interests of customers for us to have cash flow so we can continue to invest in the network to improve customer experience, and to continue to evolve our network."