Efforts by NBN Co to encourage resellers to buy up more broadband bandwidth appears to be paying off, with the Australian competition watchdog revealing a 38 per cent increase in Connectivity Virtual Circuit (CVC) acquired for the three months ending December.
The Australian Competition and Consumer Commission (ACCC) released its eighth quarterly National Broadband Network (NBN) Wholesale Market Indicators Report for the December quarter on 8 February.
The report revealed a significant increase in CVC acquired, from 1.11 megabits per second (Mbps) to 1.53 Mbps per user since the September 2017 quarter, an increase of 38 per cent.
The CVC is related to the amount of network capacity shared across a retail service provider’s (RSP’s) end-user premises. It is purchased based on the bandwidth required to service all of an RSP’s end-user premises, aggregated by that CVC.
The CVC uptake comes after the company behind the NBN offered retailers a temporary credit offer for acquiring 50 per cent more CVC per user. NBN Co also made Access Virtual Circuit (AVC) at 50 Mbps available for the price of the 25Mbps.
In December, NBN co announced several pricing changes, including the introduction of a number of new products, including a new NBN 50 wholesale bundle charged at $45 a month with 2Mbps of bandwidth included and a NBN 100 wholesale bundle at $65 a month with 2.5Mbps capacity included.
“We are pleased to see such a large jump in the CVC acquired by retailers from NBN Co this quarter,” ACCC chairman, Rod Sims, said. “With this level of CVC consumers will have faster broadband speeds and hopefully less congestion during peak evening periods.”
The latest figures suggest that the continued under-provisioning of bandwidth by some NBN resellers, which has been an ongoing cause of friction between NBN Co, resellers and end customers, could be coming to an end.
“NBN Co’s response to retailers’ concerns about CVC pricing seems to have had an impact on the amount of CVC being acquired which we believe will benefit consumers through better quality broadband,” Sims said.
The latest report by the ACCC also revealed that, by the end of 2017, at least five NBN RSPs were connected to all 121 points of interconnection (POIs), while other smaller resellers also continued to increase their access in the last quarter.
Additionally, the number of services connected to the NBN rose from just over 3 million to nearly 3.5 million in the December quarter, an increase by 14 per cent.