Average NBN Bandwidth per Customer remains below levels of 18 months ago

Declining Bandwidth DEMAND

Currently most Customers when ordering nbn Services have a choice between 12, 25, 50 & 100 Mb/s services. ACCC classifies 25 Mb/s or greater as “Superfast Broadband Access Services”.

A weighted average view of nbn Bandwidth reveals the average Bandwidth of services ordered is declining and remains well below the levels of 18 months ago. This decline does not currently reflect the populist and media view of rapidly increasing demand.

It is highly likely most Customers are discovering that a 25Mb/s service is more than adequate for their current needs.

Service Provider Upsell Effectiveness

Average Bandwidth is  a de facto measure of upsell effectiveness for Retail Service Providers (RSP’s), as higher bandwidth services not only improve revenue they also present a higher gross sales margin.

Currently Optus remains the leader in terms of highest average bandwidth per Customer, however, if current trend continues may soon be usurped by the smaller “Other” RSP’s (whose Avg. Bandwidth has been rapidly improving over the last 3 quarters)

Telstra, whilst having the largest number of nbn services, is relatively lowly placed on the Bandwidth ladder.

A combination of lower margin low bandwidth services combined with higher organisational overheads may present a real challenge to providing a profitable nbn service for the bigger Retailers.

The smaller RSP’s (grouped under “Other”) are focusing on the higher margin higher bandwidth market. This combined with their lower overheads makes them well placed to be profitable.

Acquisition and retention strategies need the right balance of quantity versus bandwidth.

Disclaimer: Datahub Pty Ltd provides data processing and analytical services for Telecommunications Industry but is not affiliated with nbn. All analysis is provided from publicly available data sources.

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