In a shock move, Telstra has announced that it will halve the speed of its fastest broadband internet plan on offer to the majority of NBN customers.
On Wednesday, IT News reported that the firm had stopped offering its 100Mbps NBN plans to customers connected to the NBN via three of the seven different technology types: fibre-to-the-node, fibre-to-the-curb, and fibre-to-the-basement.
The 50Mbps plan will now be the fastest Telstra NBN available to the more than 50 per cent of premises with FTTN/B/C connections.
Only customers with fibre-to-the-premises (an estimated 19 per cent of premises) and hybrid fibre-coaxial (an estimated 23 per cent) connections will be able to sign up to Telstra’s “premium speed” 100Mbps NBN plans.
The decision was made because “a number of our customers on FTTN/B/C do not have connections that are capable of achieving 100Mbps”, Telstra said.
“It is often the case that customers that sign up to these plans will be subsequently notified that they cannot achieve top speed and end up downgrading to a lower plan or leaving,” a Telstra spokesperson said.
“We want to ensure these customers have the best possible experience when connected to our plans and hope to have some news soon.”
NBN users, and those waiting to be connected, can check their home’s connection type here.
Move highlights NBN’s speed, reliability issues
Telstra’s decision to nix 100Mbps plans for FTTN/B/C connections highlights the ongoing issues with the $51 billion mixed-technology NBN.
When the Coalition government took power in 2013, it scuttled Labor’s plan for a network with 93 per cent fibre-to-the-premises (FTTP) coverage, instead rolling out an assortment of technologies of varying quality, that experts have long warned will fail to meet the needs of consumers.
Last year, Swinburne University of Technology technology expert Steven Conway warned that the NBN’s speed, reliability, and congestion issues would worsen, particularly for the more than 40 per cent of users with FTTN connections, as more users come online before the June 2020 completion deadline.
Telstra’s decision to axe 100Mbps plans for FTTN/B/C customers shows that the NBN has failed to deliver for Australians, he said.
This was absolutely predictable from the day they decided they were not going to do FTTP,’’ Dr Conway said.
“Anyone with any understanding of how broadband infrastructure works would have told you that there are going to be innumerable problems emerging from this kind of short cut.”
Dr Conway said that the NBN’s speed constraints mean that most Australians will be unable to take advantage of cutting edge and future technologies.
The NBN’s problems will continue to worsen, with Australia fast approaching “a breaking point where we are going to be left far behind”, he said.
“When you compare us to any other first-world country, in terms of the speed at which data can move and the amount of data we have to move, we’re going to be left in the dark ages.”
Dr Conway said that while it will be expensive to fix the NBN’s issues, it must be done without delay.
“We obviously are in a situation where we’re quickly approaching the precipice,” he said.
If we don’t take action within the next 12 months we are going to suffer quite enormously – on a macro scale as a country – economically.
“We need to be able to participate in first-world information economies at a level comparable to our competition.”
Vodafone, Optus keep 100Mbps plans
Two of Telstra’s biggest competitors told The New Daily they would continue to offer 100Mbps NBN plans to FTTN/B/C customers.
An Optus spokesperson said the firm offers NBN’s 100Mbps services to its customers.
“Optus frequently evaluates and adjusts our product offerings according to demand and customer feedback,” the spokesperson said.
A Vodafone spokesperson said the firm was “very proud” that “over 40 per cent” of the firm’s NBN customers are connected to the 100 speed tier.
“When customers connect with us, we conduct a speed test to ensure their connection can support minimum speeds, and adjust their plan if necessary,” the spokesperson said.
“As a result of this and our 4G backup, customer complaints are low.”
‘Most households won’t be affected’: ACCAN
Australian Communications Consumer Action Network chief executive Teresa Corbin said that “most households won’t be affected by Telstra’s move”, as only 8.4 per cent of consumers nationwide are on NBN100 plans.
The decision may also help consumers avoid disappointment, with the consumer watchdog previously fining telcos for “selling consumers NBN plans that weren’t able to deliver the promised speeds”, she said.
“Stopping the sale of NBN100 plans to FTTN/B/C customers means that Telstra avoids misleading consumers whose connections are unlikely to be capable of achieving 100Mbps,” Ms Corbin said.
But the move could hurt NBN Co’s already ailing bottom line.
“NBN Co has been encouraging consumers onto the higher speed tiers, so they will likely be disappointed by Telstra’s decision to limit their NBN100 customer base,” Ms Corbin said.
Earlier this month, NBN Co chief executive Stephen Rue said the rollout of the $51 billion national broadband network was “well positioned” to be completed by June, and the firm would not be seeking additional taxpayer funds.
But the firm also revealed a massive financial loss of more than $2 billion in its half-year results.