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Posted: 2019-06-19 14:00:00

At the moment, the "underserved" members of the population include economically disadvantaged people, renters, those who live alone and certain segments of the elderly, NBN chief customer officer Brad Whitcomb said.

The Australian Communications Consumer Action Network began a campaign in February for cheaper broadband on 50Mbps plans to be offered to households receiving government support. The idea received widespread support among telcos.

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Telstra chief executive Andy Penn has also been pushing for a drop in the overall wholesale price, saying ahead of the election that the Coalition government would come under pressure to change pricing due to "the laws of arithmetic" sparking discussion about a potential writedown of the NBN.

Mr Whitcomb said newly appointed communications minister Paul Fletcher was "aware" of the potential pricing changes but they had been developed by an internal team with all the changes "consistent with our corporate plan".

A sharp drop in the prices charged to retailers could put the NBN, which has a target return of 3.2 per cent, under financial pressure. The NBN needs to generate a financial return to remain an off-budget asset on the govenrment's books.

Last year, ratings agency S&P said it thought an NBN write-down was inevitable, questioning its ability to generate returns, in part due to its prices.

Mr Penn's comments were slammed by Vodafone chief executive Inaki Berroeta who said Telstra took "billions" a year in payments from the NBN Co and it was smaller providers that struggled the most and should be the focus of any changes.

Mr Whitcomb said the calls from some telcos to lower the price was "a natural pressure".

"It's just the way the supply and demand work that we would have the retail service providers asking is there a way we can provide more at a lower cost," he said.

The NBN Co introduced a discount pricing change in 2018 to encourage the take up of higher speed options as the majority of Australians were paying for the lower 25Mbps plans.

This promotion halved the price of the 50Mbps plan and slightly reduced the 100Mbps price, with 63 per cent of Australians connected to the NBN now on 50Mbps or faster compared to 16 per cent in 2017.

"Moving into the bundles has proved to be extraordinarily successful for the industry," Mr Whitcomb said, with 20,000 to 40,000 a week being upgraded to higher speed tiers.

One possible option is the creation of a new cheaper plan offering 100Mbps download speeds but with slower upload speeds of 20Mbps compared to the current 40Mbps. Mr Whitcombe said households rarely uploaded enough to justify needing 40Mbps.

"That would take pressure off our network cost, pass benefit on to customers as well," he said, but some telcos have complained about the complexity of the plans available.

Mr Whitcomb acknowledged the NBN Co had received feedback that operations could be simplified around the different bundles and product offering, and said part of the consultation was to find ways to make this more straightforward.

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