NBN Co Stepping Up the Development of Services for Business Customers

S. Soh

Summary Bullets:

  • NBN Co is developing capabilities to support business users, including providing higher QoS and enhanced customer support.
  • With better connectivity, service providers have opportunities to offer more products and services (e.g., cloud, collaboration and networking) to businesses of all sizes.

NBN Co has been looking to the business segment to grow its revenue and has publicly discussed the aim to make $1 billion in revenue from this segment. While many small businesses are already using residential-grade NBN services, there is a demand for connections with higher service levels, lower contention ratios and better performance. In December 2018, NBN Co indicated that its network had reached half a million businesses. NBN Co is doubling down on developing products for business customers, and this will accelerate as it reaches more businesses across the country.

NBN Co is reportedly embarking on a project to extend fibre access to 400,000 businesses in 160 discrete regions and locations across the country over two years. NBN Co will target areas that have strong business presence, including state and territory capital CBDs as well as outer metro and regional commercial zones. For example, the northern Sydney hub of St Leonards and Gore Hill has been mentioned as one of the first such districts. This is crucial for businesses which are increasingly using cloud services and applications that are driving more traffic across the network. The availability of faster access and higher service levels will motivate businesses to adopt other technologies such as cloud, collaboration, big data analytics and IoT. Laying fibre to customer premises is costly, and telcos such as TPG and Vocus will only cover CBD/metro areas. NBN Co is in the best position to extend fibre access to business districts outside key metro areas.

In December 2018, NBN Co introduced wholesale discount bundles for businesses, combining faster access, committed bandwidth and premium service levels (e.g., 12-hour enhanced SLA with 24/7 support between NBN Co and retailer). To help increase service continuity and reduce interruption for businesses, selected wholesale discount bundles will also include the option to install a subsequent line to test critical applications before connecting to the NBN access network. In August 2018, the company launched a business operations centre to provide specialist technical support dedicated to business customers, with the aim of reducing disruption and increasing certainty for businesses as they migrate to NBN. The company is also reportedly introducing new bundles which mirror the residential bundles, combining 25 Mbps, 50 Mbps and 100 Mbps access virtual circuits (AVCs) with 2/2.5 Mbps of connectivity virtual circuits (CVCs). The bundles are aimed at improving customer experience, overcoming the issue with retailer under-provisioning, which impacts speeds during peak times.

With access to over half a million businesses, the NBN is becoming an attractive conduit to SMBs in Australia. This will entice more service providers to offer business-grade NBN products to businesses around the country. Cisco, for example, is offering service providers incentives (including cash rebates) for deploying its SMB products with NBN broadband. Cisco and NBN will conduct a joint digital marketing campaign this year to promote the joint services. This is a win-win for both Cisco and NBN Co, because Cisco aims to penetrate the SMB segment and customers migrating to NBN are an opportunity for Cisco to promote its products (e.g., Meraki and Webex). NBN Co, on the other hand, wants to demonstrate the value of its high-speed broadband and encourage businesses to pay for faster and higher-quality broadband services. The migration to NBN should also be seen as an opportunity for telcos to offer a wider range of services to business customers. The trend is now towards delivering services more effectively through a digital platform that automates manual processes and offers better response times. Service providers targeting large enterprises can take further steps to offer consulting services to help enterprise transform their network and implement their migration plan. Smaller service providers can also work with NBN Co to gain support in marketing and educating customers on the benefits of NBN-based services.

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