'More cost-effective' NBN business pricing on the way

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'More cost-effective' NBN business pricing on the way

NBN Co is dropping the wholesale prices of its business-grade services by "up to 70%".

Details are sketchy, but NBN Co says it will introduce a “spend cap” on 1 October. This, it says, will reduce the monthly wholesale charges for the Traffic Class 2 wholesale product, which is aimed at mid-sized and large businesses.

This should hopefully result in flow-on cost savings to those business customers.

Traffic Class 2 is more tightly defined than the regular services used by residential and small business customers, for example by providing known minimum speeds. The service is therefore suitable for applications such as multi-line voice, high-definition video conferencing and online backup.

“We've taken on board the feedback provided by a number of our retail service providers and have developed a new pricing model to enable those offering high-speed broadband, voice services and after-hours care on the NBN access network to market their products at a more cost-effective price for their business customers,” said NBN Co executive general manager, product, sales and marketing for business Ben Salmon.

“These product offerings are particularly aimed at helping Australian medium and enterprise businesses to harness technologies such as cloud computing, multi-line voice, video conferencing and multimedia-rich applications to increase their efficiencies and drive revenue growth.”

No specific details were given for the likely savings to business customers as wholesale prices will vary according to the amount of bandwidth purchased by the service provider. However, the greatest reduction is expected to be seen in the higher speed tiers.

UPDATE: NBN Co business external affairs manager Talia Spink told Business IT that the cap means retail service providers (RSPs) can save “up to 70 percent on wholesale monthly charges.”

It is up to RSPs how they package and price their retail products for business customers –just as they do for residential customers – but “we expect that retailers will pass on the reduction of cost to their business customers in order to drive better value broadband for the market.”

The change means NBN Co has cancelled its proposed Business Ethernet product.

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