“As the network expands, you will always get more complaints because, if you’ve got three million customers, you’ll get more than if you’ve got 50,000. Plainly,” the Prime Minister told reporters in Canberra today.
“But one complaint is one complaint too many – so I am determined to ensure that we address those issues and that people get the speeds they have paid for.”
NBN Co chief executive Bill Morrow says because retailers are aggressively competing for market share, they’re unable to charge consumers what he believes they should be paying for increased bandwidth.
As a result, some households and businesses are unable to access the high speeds they expect or are led to believe they can expect by retailers.
The number-one NBN consumer issue is broadband speeds between 7pm and 11pm – which Morrow dubs the “Netflix hours”.
Consumers were led to believe they could access broadband speeds of between 12-25 megabits a second for the same price they were paying for a pre-NBN service (5 megabits a second).
About 85 per cent of premises were signing up to speeds of 25 megabits or less, and market studies showed of those, three out of four were “quite satisfied” with what they were paying and the service they’re getting, Morrow said.
“The reality is … about one in four people are unhappy with the way their service is being produced.”
Morrow said what consumers were paying retailers and the money retailers were paying NBN Co was not enough to even to recover the $49 billion cost of rolling out the network.
“If the [retail service providers] RSPs cannot get the consumers to pay more, then we have a problem.”
But he said it was too early to say whether that meant additional taxpayer support would be needed.
Turnbull admitted the NBN’s return of 3 per cent was not enough for it to be deemed a government asset or make it a commercial return for the stock market.
On another front, Morrow believes his company may struggle to compete with mobile networks.
Low-cost city connections were subsidising the more difficult-to-wire homes, but margins would be squeezed if city customers turn to ultra-fast mobile networks for their internet connections.
“We are kind of fighting the competitive fight with one hand tied behind our back,” Morrow said.
The NBN is trialling fibre-to-the-curb technology, which takes cable to telecom pits outside premises, which is closer than fibre-to-the-node as well as cheaper and less complex than fibre-to-the-premises.
NBN Co expects to serve an initial one million premises with FTTC and estimates the technology will cost about $2900 per premises to deliver compared to $4400 for FTTP.
The Telecommunications Industry Ombudsman’s annual report released last week showed NBN complaints, including those about delayed connections, soared from 10,487 to 27,195.
Local News Matters
Media diversity is under threat in Australia – nowhere more so than in South Australia. The state needs more than one voice to guide it forward and you can help with a donation of any size to InDaily. Your contribution goes directly to helping our journalists uncover the facts. Please click below to contribute to InDaily.