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Vocus says NBN pricing still not fit for purpose

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The high wholesale prices charged by NBN Co have been a perennial point of friction between it and the retail telcos. Vocus and Telstra have been notably vocal in their criticism of the CVC charge – a price that covers the amount of bandwidth telcos can make available to customers, which the industry says has led to expensive NBN plans for customers.

The NBN decided in March to provide more bandwidth to telco providers free of charge to help them meet the increasing consumer demand caused by the coronavirus pandemic. The additional 40 per cent capacity – which was provided free of charge – has been offered to providers until August 19.

NBN Co is expected to announce rollout completion by the end of this month, but there will still be a large number of premises that won’t be connected to network or will require upgrades to their connections.

“The consumer sign up to the NBN will play out for another 18 months post rollout completion,” Mr Russell said. “The question at that point – 18 months down the line – will be how the market thinks about pricing.”

“You get past this market share grab that a number of operators are focused on and you start to move into people looking at the price on a more sustainable basis.”

Vocus, which owns Dodo and iPrimus, secured a $1.39 billion debt facility and new loan agreement for Australia and New Zealand on Thursday and reaffirmed guidance of between $359 million and $369 million for the full financial year.

But the telecommunications industry, like many sectors, is adapting to the effects of severe economic downturn which will impact businesses over the next 12-18 months.

“We are not seeing an impact in terms of consumer sentiment,” Mr Russell said.

“Our core product in the consumer market is NBN broadband and that is a critical service for everybody today.” “My experience in previous difficult periods…has been telecommunications services are traditionally very robust because they are essential in nature.” In the long-term the economic downturn will create opportunities for us because one of the key strengths we have as an organisation…is we are small, nimble – we can adjust to the market circumstances,” he said.

Mr Russell added that the debt facility, which was planned before the pandemic, would be used to support ongoing operations and future growth of the business.



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