Recent ruling from the Australian Competition and Consumer Commission (ACCC) on Government’s proposed Regional Broadband Scheme, according to which smaller internet service providers (ISP) will be able to pass on the “NBN tax” to customers, has created some turbulence among the big telecommunication players. NBN Tax is the Government proposed regional broadband Scheme charge, which will be passed on the customer lines to help fund NBN Co.’s supply of non-commercial regional fixed wireless and satellite services.
This move primarily indicates that end customers who receive superfast fibre broadband from non-NBN sources will pay tax to help coverage in regional Australia. As per ACCC, Telstra, TPG, Vocus, and Opticomm are some among the major operators in the non-NBN landscape, who have been alleged of selecting profitable city clientele while the NBN gets to cover unprofitable rural areas. It has also been highlighted that smaller broadband providers that are supplying less than 12,000 customers will be exempt from the rules as the extra charge is thought to pose “an unreasonable burden” with “little benefit to customers”. This extra charge being talked about is speculated to be an additional monthly fee of around $7.
The announcement led the stocks of the key telecom players like TPG Telecom, Telstra and Vocus witness a downswing. For instance, TPG Telecom (ASX: TPM) was down 1.3% on May 26, 2017 while Vocus (ASX: VOC) slipped by 3.3%. This comes at the back of the understanding that non-NBN high-speed ISPs will now need to set the prices of their service in line with those on the national broadband network. With some bit of haziness at the moment, the telecom sector stocks will be watched out for further developments in the above regard.
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