NBN Co is stepping up its bid to chase enterprise and government accounts, revealing plans to “prioritise” their orders as it tries to take 20 percent of its total revenue from the business sector.
The network builder today unveiled plans to employ a general manager of business connections, a new role “developing and implementing the overall strategy for the connection of business customers to the NBN.”
“The purpose of the business connections team is to ensure that NBN Co delivers connections for its business customers to the NBN to meet order volumes at the required time, cost and quality,” the company said.
NBN Co has not publicly detailed its goals for the business segment aside from revealing back in May that it wants business revenue to “make up between 15-20 percent of overall revenues once in steady state operations”.
The company indicated earlier this month that it will pursue business users across a range of segments: “micro, small, medium and E&G [enterprise & government].”
While the NBN was always going to go after the business market, to date this has been widely understood as the conversion of business DSL and ISDN users from Telstra onto the NBN.
NBN Co’s own business Ethernet products - which former Telstra customers would move to - have been delayed several times, though are expected to make an appearance before the end of the year.
The foray into the enterprise and government market, however, is a recent development that has raised the ire of the private sector.
NBN Co indicated today that it is already making plans to afford enterprise and government sign-ons “prioritised” treatment.
Its soon-to-be-appointed GM of business connections will be charged with establishing “factory processes” to ensure E&G customers are smoothly on-boarded.
“This will involve establishing tags to provide visibility of business customer orders and ensuring those orders are prioritised to deliver to enhanced business targets,” NBN Co said.
“This will include where necessary providing project/case management for those business orders.
“It is expected that this project managed solution will be necessary for all enterprise & government customers and for a subset of small/medium business customers.”
It did not say what “subset” of non-E&G users would qualify for the priority treatment.
NBN Co’s ambition to expand into the lucrative E&G market has been laid out piecemeal and by stealth.
The government recently amended planned broadband tax laws to cover all existing fixed-line enterprise services - a move widely criticised by telcos.
The tax was originally meant to be applied only to carriers that try to compete with NBN Co; as NBN Co has no enterprise services at present, the move was widely seen as a precursor to an incursion into the enterprise market.
NBN Co confirmed this last month, contentiously arguing that its remit “does not distinguish between small business and larger enterprise customers”.
The company’s most recent corporate plan makes no mention of a desire to pursue enterprise, government or E&G customers.
The E&G entry is likely the result of sustained pressure on NBN Co’s financial model. The company has struggled to achieve any growth in average revenue per user (ARPU) in the residential segment, and plans to recoup costs via a backhaul charge known as the connectivity virtual circuit (CVC) have also fallen flat, as ISPs buy less than expected.
That has put NBN Co under pressure to find alternate sources of revenue, leading to forays into the IoT market as well as wider plans for the business segment.
Its key challenge in executing a successful raid on E&G accounts, however, will be its ability to offer connectivity and customer service levels that such users expect.
Last week it outlined plans to “liaise with the industry – business customers, enterprise and government clients and [ISPs] to identify the business grade service expectation needs and to translate those into business requirements and into a design that enables NBN Co to deliver the operating model capable of supporting these segments.”
