Why NBN's new plan to 'turbo-charge' internet speeds could cost you more

Australia is set to get faster broadband speeds, and while it will come with "no extra wholesale cost", not everyone is convinced customers won't face higher plan prices.

Download speeds would increase up to five times under a new NBN Co proposal. Source: Getty / The Good Brigade

KEY POINTS

• NBN Co is set to upgrade the speeds of three plans.
• It says retailers won't face increased wholesale costs, but an expert says customers may still see plan fees increase.
• It's hoped the faster speeds could be available later this year.

The NBN will boost the speeds of select plans in a move that it says will benefit millions, but there are concerns Australians might have to fork out more.

NBN Co announced on Tuesday that some, but not all, of its speed tiers would be "turbo-charged". The upgrade will apply to its faster, more expensive, packages, including:

• NBN Home Fast, to move from 100 Megabits per second (Mbps) download speed to 500Mbps, and 20Mbps upload speed to 50Mbps.
• NBN Home Superfast, to move from 250Mbps download speed to 750Mbps, and 25Mbps upload speed to 50Mbps.
• NBN Home Ultrafast, to move from between 500 to 1000Mbps download speed to between 750-1000Mbps, and 50Mbps upload speed to between 50-100Mbps.

Customers will need a Fibre to the Premises (FTTP) or Hybrid Fibre Coaxial (HFC) connection to access the faster speeds.

Those on NBN plans who are already connected to these higher speed tiers will be automatically upgraded, NBN Co said, although in some cases customers may need a new modem or router to deliver them.

The NBN network is currently being upgraded. Source: AAP / Brendan Esposito

NBN Co said 9.1 million homes and businesses could access the faster speeds by December, while an additional 1.1 million users could receive the upgrade by the end of 2025.

It would follow a raft of upgrades from copper to full fibre-optic connections as part of a $2.4 billion investment in the network.

Broadband users connected to the NBN with older copper or fibre-to-the-curb (FTTC) technology would be able to apply for a FTTP upgrade under the proposal if they took out a plan with one of the faster service speeds.

“And, most importantly, we are proposing to deliver these accelerated speeds at no extra wholesale cost to internet retailers," Anna Perrin, chief customer officer at NBN Co, said in a statement.

But customers might still face higher plan fees despite no increases to wholesale costs, according to associate professor Mark Gregory, a telecommunications and network engineering expert at RMIT University.

"One is the cost of transit, because unfortunately in Australia we're still charging for data," Gregory said.

"And so while from the NBN-end these speed increases might come at no additional cost to retailers, the retailers then have to pay for the transit costs."

Opposition communications spokesman David Coleman has also questioned whether the upgrades would add to household bills.

"NBN says the upgrade would come at no extra wholesale cost to retailers but what about the cost to consumers?" he said.

"Any increase to the cost of plans will make the NBN less competitive compared to other options such as 5G."

The higher speeds won't come with additional wholesale costs, although that doesn't necessarily mean customers will be spared increased plan fees.

Gregory said the "disproportionately low" upload speeds (compared to download speeds) were also of concern, especially as we store more data in the cloud and face new technologies like augmented and virtual reality.

"If you want people to utilise the modern technologies and systems ... then you need to provide the upload speeds that match," he said.

Despite his concerns, Gregory welcomed the move, saying it followed what had already been rolled out in other countries.

When unveiling the NBN in 2009, Labor's vision was for the majority of premises to be connected via FTTP, with the remainder to be connected via fixed-

wireless and satellite technologies.

But that changed when the Coalition came to power in 2013, which instead moved to deliver the NBN through mixed technologies, such as FTTC and fibre-to-the-node (FTTN) which partly use the old copper network and deliver slower speeds compared to FTTP.

Perrin said the upgrade was needed because Australians were becoming increasingly data-hungry.

The average Australian household consumed about 40 gigabytes of data a month a decade ago. Nowadays, some people can use that in a day, Perrin said.

“The average household now consumes 443 gigabytes per month across 22 internet-connected devices," she said. "We predict that average will grow to 33 connected devices by 2026 and 40 by the end of the decade."

NBN Co will seek industry feedback on the proposal over the coming weeks.

"The government expects NBN to consult closely with its retail partners and work with them to enable these speed enhancements to be available for consumers as soon as practical," Michelle Rowland, the federal communications minister, said in a statement.

- With the Australian Associated Press.