There are two wholesalers of the national broadband network (NBN) who is incapable of delivering new cheap bundle plans of NBN to its retailers in full. This has resulted in the collapse of one NBN reseller and there are more upcoming resellers who will join the line.
It is the high time when Telstra Corporation Limited (ASX: TLS) and Vocus Group Limited (ASX: VOC) need to make cheaper bundles that will be fully available to the clients for more than 6 months.
As per the recent updates Telstra has prepared a bundle with the speed of 50 Mbps available to its retailer. However, the other sources say that they are not selling 100 Mbps bundles to any of its retailers.
There were two retailers of VOC claims that VOC was incapable of delivering cheap bundles in spite of multiple requests raised to them. They also failed to respond to these retailers within the deadline.
The NBN reseller Mungi collapsed as a result of the failure in offering the new pricing plans of NBN., which went into charitable administration this Tuesday 20 November 2018.
Jamie Le who is the founder of Mungi, warns other small retailers that they might also experience a similar situation or might go through a very struggling phase.
Now, a new plan is being introduced where NBN bundles are combined having a speed of 50mbps or 100 Mbps per month plan with a bandwidth of 2mbps or 2.5mbps. A bundle which is having a speed of 50 Mbps will be priced at $45. Those bundle whose speed is 100 Mbps is priced at $65. This price represents a discount of 27% and 10% respectively on this new plan as compared to their previous plans. The motive behind introducing a new plan was to encourage retailers to switch to faster speed plans.
Mr. Le was disheartened while he expresses that Mungi had only 2600 users before it collapsed. A request was already raised to wholesaler VOC to provide new cheap bundle, however, the request got rejected stating that there were some legacy issues. A similar request was raised to another wholesaler as well who was also equally unwilling to provide new plans with the same legacy issue.
NBN provides broadband to only a few retailers. Rest others need to buy from these retailers. Those who buy from wholesalers get the older price. The big players are getting the new pricing which is difficult for others to compete.
Mr. Le comments that Mungi had some really cool features with them, however, the people switch their providers for cheaper plans just to save $2.
There are 14 wholesalers of NBN in total. Out of these 14, TLS is the biggest as it buys 49.8% plans of NBN. Next comes TPG who holds 21.7% of NBN’s plan followed by Singtel Optus Pty Limited with 13.6% and VOC holds the 4th position with 8.6% NBN’s plan.
Based on the above information it can be concluded that the top three wholesale buyers and the three biggest internet retailers are same. Vodafone does not buy from NBN wholesaler, but soon it is going to merge with TPG. There is still pending approval from the shareholders and the regulators.
Once wholesalers buy plans directly through NBN, then bundling will come under their control and they have no obligation to sell these bundles to the retailers.
It is being confirmed by Singtel Optus Pty Limited that they are offering new bundles to these retailers.