TPG
Telecom
wants
NBN
Co
prevented
from
raising
its
prices
every
year
until
at
least
2032,
with
only
periodic
price
rises
possible
every
three-to-five
years.
In
a
submission
to
the
ACCC,
sighted
by
iTnews,
TPG
argues
that
NBN
Co
should
not
be
able
to
increase
its
prices
every
year
of
a
“regulatory
cycle”,
which
covers
a
period
of
three-to-five
years.
The
telco
also
said
the
current
special
access
undertaking
(SAU)
draft
gives
NBN
Co
too
much
leeway
to
make
material
changes
to
pricing.
“One
potentially
very
destructive
outcome…
is
an
RSP
[retailer]
could
sell
a
lot
of
a
particular
product
today,
yet
find
it
will
receive
lower
margins,
or
potentially
negative
margins,
the
following
year
when
NBN
Co
releases
an
updated
tariff
list,”
TPG
Telecom
wrote.
“More
detrimentally,
this
proposal
does
not
provide
medium-term
price
certainty
for
consumers.
“For
instance,
if
NBN
Co’s
revenue
targets
are
not
tracking
to
expectations,
NBN
Co
will
have
significant
incentives
to
simply
increase
prices
at
the
product
level
to
remediate
any
top
line
revenue
shortfalls.
“It
is
not
in
the
long-term
interests
of
end
users
for
NBN
Co
to
have
the
incentive
and
ability
to
exercise
this
kind
of
pricing
power.”
TPG
Telecom
argues
that
prices
should
only
be
allowed
to
be
discounted
or
decreased
during
a
regulatory
cycle.
“This
structural
constraint
would
ensure
NBN
Co
is
discouraged
from
simply
raising
prices
at
the
product
level
to
meet
top
line
revenue
shortfalls,”
the
telco
wrote.
“This
constraint
will
also
stimulate
innovation,
as
the
only
other
opportunities
available
to
NBN
Co
to
increase
revenue
is
by
upselling
to
existing
customers,
on-boarding
end-users
who
have
chosen
to
not
use
the
NBN,
or
by
continuing
to
innovate
on
the
product
side.
“For
clarity,
we
believe
NBN
Co
should
have
the
freedom
to
decrease
prices
to
stimulate
demand,
but
it
should
not
have
the
ability
to
increase
prices
unilaterally
on
an
annual
basis.
“This
constraint
needs
to
be
in
place
until
at
least
2032,
at
which
point
in
time
the
ACCC
will
undertake
a
review
of
the
SAU.”
Pay
dearly,
yearly
TPG
Telecom
said
that
if
the
SAU
is
approved,
it
would
mean
immediate
price
increases
for
many
users,
“and
all
consumers
should
expect
to
pay
more
every
year.”
Users
could
also
expect
“potential
price
shocks
and
no
certainty
on
the
cost
of
their
NBN
service
beyond
12
months,
regardless
of
whether
they
are
an
existing
or
new
customer”,
as
well
as
fewer
choices,
particularly
in
the
sub-100Mbps
space.
In
the
100Mbps-plus
space,
meanwhile,
TPG
Telecom
said
promised
cost
reductions
“could
be
rolled
back
within
two-to-three
years”
under
a
complicated
price
cap
mechanism
that
NBN
Co
has
proposed
introducing.
The
cap
is
among
measures
in
the
SAU
that
TPG
Telecom
says
introduce
unnecessary
complexity.
Downplaying
increases
The
telco
said
NBN
Co
had
tried
to
convince
it
that
price
changes
“will
not
be
as
drastic
as
suggested”
but
that
it
didn’t
put
weight
in
NBN
Co’s
modelling
assumptions,
“which
we
do
not
believe
are
robust”.
NBN
Co
provided
similar
commentary
to
iTnews
yesterday
after
Vocus
shared
concerns
about
the
price
rises
enabled
by
the
SAU.
TPG
Telecom
argued
the
simplest
way
to
price
NBN
services
is
flat-rate
pricing
on
all
services
immediately.
ACCC
stance
It
also
asked
the
ACCC
to
adopt
a
tougher
approach
to
dealing
with
NBN
Co,
given
repeated
SAU
drafts
over
several
years
have
now
failed
to
gain
industry
support.
“We
support
the
ACCC
approaching
NBN
Co’s
claims
with
scepticism
and
toughness,
as
it
would
for
any
other
monopoly
provider,”
TPG
Telecom
wrote.
“The
regulation
of
the
NBN
has
been
approached
with
uncharacteristic
passivity
for
the
past
decade.
“It
would
be
a
gross
injustice
for
the
status
quo
to
continue
for
the
next
two
decades.”
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