Most Australians switching to NBN do so for cheaper rates

Peter Terlato 16 December 2017 NEWS

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Increased competition has created an extremely competitive market where price is a key differentiator.

The latest Australian broadband analysis found the majority of households that have switched to the National Broadband Network (NBN) or changed NBN providers in the last year, did so to take advantage of cheaper rates.

Roy Morgan Research revealed 15% of households with an NBN connection, switched to the service or changed NBN providers in the last 12 months. The majority (53.7%) indicated lower priced rates encouraged the shift. This is almost double the rate of a year ago (26.9%) and also exceeds existing fixed broadband users (28.9%).

Almost one third of households cited faster data connection/download speeds (31.6%) and clear plan pricing (29.5%) as motivations to switch over or change NBN providers. These were also higher than one year ago.

However, households that switched to an ADSL or cable provider were just as likely to make their decision to change based on faster connection and download speeds (30.5%) as those that selected an NBN provider.

But switching to ADSL or cable for cheaper rates (38.8%) or clearer pricing (24.2%) was not as relevant.

"Increased competition for NBN service providers, including the recent entry of Vodafone and Amaysim's price-competitive packages, and the increasing number of smaller providers, has created an extremely competitive marketplace with price used as a key differentiator," Roy Morgan chief executive Michele Levine said.

"Just in the past week the NBN has belatedly recognised the competitive pressures the industry faces and cut bandwidth charges for their top-speed NBN connection plans of 50Mbps and 100Mbps by up to 27%."

TPG was the first cab off the rank, announcing that its new NBN50 plans will be priced at $69.99 per month with unlimited data usage. If you had signed up prior, that would have only scored you a 25/5Mbps connection.

TPG has also joined Telstra and Optus in advertising its typical evening speeds for plans as part of its sign-up strategy, a move that is strongly advocated for by the Australian Competition and Consumer Commission.

After admitting it may have breached consumer law, Optus will compensate more than 8,700 customers who were misled about maximum speeds they could achieve on certain Optus national broadband network plans.

Check out our latest Findings to discover how NBN Co plans to raise speeds, reduce congestion and cut prices.

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