iiNet tips margins per customer to increase by 16 per cent under NBN

iiNet tips margins per customer to increase by 16 per cent under NBN

The Perth-ISP has made some NBN calculations for its investor update presentation

Perth-based ISP, iiNet, is expecting its margin per customer to increase by 16 per cent under the National Broadband Network (NBN).

With the NBN’s aim to increase competition and loosen Telstra’s stranglehold in the telecommunications wholesale market, savings for smaller ISPs were more or less expected.

Companies such as Internode had previously complained NBN Co’s wholesale model would push up prices for NBN services.

Last month, NBN Co heeded the criticism and offered rebates for wholesale charges which, according to the company, could save ISPs up to $300 per month per point-on-interconnect (PoI) in the short term.

In an investor’s update presentation, iiNet claimed overall average cost per user would drop from $46 to $34 under the NBN. That’s a 27 per cent difference.

This would then drive overall margins from $28 per customer to $32 per customer; a 16 per cent increase.

Numbers are based on a mixed customer base of DSL and voice services including bundles from all iiNet-owned companies. Margins exclude additional product and services take-up such as IPTV.

iiNet did note the calculations were based on “mapping of similar quota levels and current bundling rates for the calling pack” along with projected take-up of its NBN plans.

Pricing for the NBN plans were announced on Monday.

The detailed presentation even factored in the possibility of the Coalition taking over Government during the course of the NBN build phase.

In July, iiNet chief, Michael Malone, told ARN that while he is a supporter of the Labor-backed NBN, he was not too concerned about the Coalition taking over the project.

“The argument around the NBN has become more nuanced, particularly in the last few weeks and months, so whichever government builds it, I think we are going to have ubiquitous high-speed and affordable broadband,” he said at the time.

That sentiment was echoed in the investors’ presentation.

“The destination is fundamentally the same, it’s only the path that is different… either way, increased access to high-speed broadband is a good thing for iiNet,” the ISP said in the presentation

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Tags broadbandnbn coiiNetTelecommunicationsinternodeNational Broadband Network (NBN)


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