NBN Co rezones businesses for cheaper pricing

NBN Co is hoping to encourage more businesses to switch to its enterprise products by lowering their connection costs from Wednesday this week.

The network builder said in a retail service provider (RSP) bulletin last week that it would update the way businesses are zoned for pricing purposes from October 9.

The price of NBN Co Enterprise Ethernet varies depending on where a business customer is located.

Premises are divided into four ‘UNI zones’: a CBD zone, which is the cheapest, and then zones 1 to 3, with the latter being the most expensive.

UNI or user network interface is the physical port that an NBN service is connected to. UNI is one of three components of an Enterprise Ethernet product.

NBN Co doesn’t formally define the boundaries of any of the zones publicly, presumably to allow it some fluidity to alter the classifications of service area modules (SAMs) within the zones.

It will do just that this week, with 933 SAMs reclassified from higher UNI zones to lower UNI zones. 

A SAM consists of around 2000-3000 premises, though that would be a mix of residential and business connections, so it’s not clear just how many businesses will benefit from the rezoning.

In addition to the rezoned SAMs, it is understood that NBN Co will add 519 SAMs into the NBN Enterprise Ethernet portal accessed by RSPs, allowing businesses in those SAMs to order Enterprise Ethernet services for the first time.

The rezoning and addition of SAMs is part of a sustained effort by NBN Co to make its business services more attractive.

Back in mid-August, the company cut pricing of Zone 3 UNIs and services with bandwidth profiles of 40Mbps and above.

Further changes are anticipated soon, with new pricing for all UNI zones and Enterprise Ethernet currently out for consultation with RSPs.

NBN Co is trying to get more businesses connected to enterprise - rather than residential - services on its network.

The network builder’s chief customer officer for business Paul Tyler told a Council of Small Business Organisations Australia (COSBOA) summit in late August that between 500,000 and 600,000 businesses on the NBN used residential-grade connections.

“They’re using a service that has not been designed to meet the much more demanding use cases of some business applications,” Tyler said in comments reported by MyBusiness.

“They’re not being connected to the network with a business-grade service model that is where their responsiveness requirements are being delivered.”

Most of those businesses would have connected prior to October 30 last year, when NBN Co formally launched its enterprise services.

NBN Co has since racked up several large enterprise deals with the likes of Woolworths, Coles and Australia Post, but must now try to move much of its existing business user base across to more tailored plans.