NBN price rise: Network says Elon Musk’s satellite service threatens its existence

The National Broadband Network has defended its plans to double the price of internet by 2032, claiming ‘aggressive’ competition from different wireless services, including Elon Musk’s satellite service, is threatening its existence. 

NBN’s proposed plans to hike up the price of their internet service were revealed in a report from the Australian Competition and Consumer Commission (ACCC).

It was uncovered through a redacted proposal, which determines how much the network can charge wholesale customers including Optus, Telstra and TPG. 

Internet provider NBN (pictured) is defending the price rises in Australia by claiming competition from different wireless services including Elon Musk’s satellite service, that it is threatening its existence

Elon Musk’s company Starlink has a satellite ‘constellation’ that provides internet to more than 30 countries 

However, the proposal was heavily criticised by the ACCC, claiming ‘it would result in a doubling of the cost of entry-tier internet plans over the next decade and ongoing prices until 2040’, The Age reported. 

NBN blamed the proposed usage rises on a number of factors including competition from companies that run low-earth orbit satellites and the rise of 4G and 5G fixed wireless services. run by companies including Telstra, Optus and TPG.

Elon Musk’s satellite company Starlink, operated by SpaceX, is an internet constellation that provides coverage to more than 30 countries. 

NBN said it was left with little choice but to hike prices because the companies had ‘aggressively’ marketed their services as an alternative for Aussies.

‘The consequence of this is NBN faces the risk of generating sufficient cashflows to sustain its business and continue to further invest in the network,’ the network said.

NBN said it was forced to rise prices because of low-earth orbit satellites and the rise of 4G and 5G fixed wireless services

NBN claimed it was pressures from these companies and technologies that forced it to adopt a more expensive pricing model, so it could recover costs in time.

The business model from the NBN was blasted by Australia’s top telecommunication companies, who sent a joint letter to ACCC chair Gina Cass-Gottlieb on Wednesday. 

‘NBN Co’s wholesale prices will rise and increase every year thereafter at a rate higher than inflation, thereby worsening household cost of living pressures and making NBN high-speed broadband unaffordable for many Australians,’ the letter, signed by Telstra, TPG, Vocus, Aussie Broadband and Optus, said.  

The nation’s leading telcos have heavily criticised NBN’s proposal in a letter and urged the ACCC chair Gina Cass-Gottlieb (pictured) to take control of the network’s pricing model

The telcos requested an ‘access determination’, which would hand control of NBN’s pricing to the ACCC. 

NBN predicted it would losing more than 260,000 customers this financial year to fixed wireless services.