NBN Users Opt for Medium-speed Internet Packages

Aussies connecting to the NBN are opting for medium-speed internet packages over faster internet packages, according to figures released by NBN Co.

As NBN coverage widens (NBN Co figures show that 130,759 premises had an active NBN service on December 31), users signing up are now choosing cheaper medium-speed packages over faster, more expensive packages.

The figures showed that 29% of end-users were connected to the 25/5 Mbps service (download/upload), up from 23% in the previous six months, while 42% of users signed up for the 12/1 Mbps service, down from 46%.

As for the faster 100/40 Mbps service, 23% of users had signed up, compared to 25% in the previous six months.

According to John Simon, head of product and sales at NBN Co, the company was not concerned about the drop in the demand for the faster 100 Mbps service.

“It is still early days,” Simon said. “The early adopters who signed up to the network would have bought the 100/40 Mbps service but there’s a rebalancing as the network passes more homes, which is why we’re seeing the 12/1 Mbps volume coming down and people are shifting to the higher 25/5 Mbps speeds.”

Steve Dalby, chief regulatory officer at iiNet said iiNet had a higher representation of 100-40Mbps users compared to NBN Co figures.

“We have more early adopters that Telstra, which is the other main company that is connecting customers to the NBN,” Dalby said.

Dalby also said that the figures provided by NBN Co don’t demonstrate the demands of end-users, pointing to the needs of small businesses – which generally need higher upload speeds more than higher download speeds – as an example.

“To do absolute numbers is almost meaningless because small businesses are not interested in the download bandwidth – what they’re buying is the 40 Mbps upload,” Dalby said.

Dalby used this argument to explain why providers should be allowed to design their own plans, and shouldn’t be restricted to the wholesale plans NBN Co currently offers.

“NBN Co can only see one thing: people downloading songs,” Dalby said.

“Let us make the call on what the product looks like. Give us wholesale access and we’ll build a product in line with the market. NBN Co doesn’t connect with retail users so for them to design the product is just dopey.”

Dalby had elaborated on this point at an NBN Senate Estimates hearing in Perth in January, when he likened NBN Co to an orange farmer who only allowed his oranges to be used for juice.

“We might want to make marmalade,” Dalby said.

“Why does NBN Co care what our products look like at the retail level? They shouldn’t. They should just supply the raw feed and let us succeed and fail on our own merits – knowing our customers and market.”