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NBN chief executive Stephen Rue and head of development Gavin Williams were grilled at a Senate hearing last week about how they would stop customers cancelling their services and moving to low-earth orbit satellite technology companies such as Starlink,which began its local rollout in April 2020. Williams said at the time about 10,000 users had disconnected from satellite technology Sky Muster in the last year,but did not provide any details on whether NBN Co had lost fixed wireless customers.

An NBN Co spokesperson said the company last week reported an increase in connections across its network,which services 8.5 million premises,shrugging off concerns about Starlink’s ability to nab customers. The company last week announced a new Sky Muster trial,which it hopes will deliver faster speeds and more data to customers. Sky Muster peaked at about 112,600 users in 2021,but that figure has since slid to 100,114,according to NBN Co’s most recent data.

“We currently serve approximately 100,000 customers via our Sky Muster satellites,which represents around one-quarter of the addressable premises in our satellite coverage areas,” the NBN spokesperson said. “As indicated last week at Senate Estimates,we have seen a modest decline in the last 12 months of around 10,000 premises that were connected to Sky Muster,however,we do not track whether these customers connected to an alternative service provider.

“We expected to see some seasonal decline in satellite customers. We also appreciate that we operate in a competitive market,which is good news for customers,and why we continue to invest to deliver improvements across the NBN network.” Starlink could not be contacted before deadline.

Starlink,owned by billionaire Elon Musk,is the biggest player LEO satellite player currently available,rolling out its service from April 2020 across regional Australia. The Starlink service provides internet using low earth orbit satellite constellations and promises speeds of between 100 megabits per second (Mbps) and 300Mbps and is increasingly popular in rural and remote areas that have previously struggled with strong internet coverage.

For people in remote communities,Starlink has delivered a much-needed fix to longstanding issues with internet connectivity because it offers cost-effective coverage in hard-to-reach places.

In May last year,NBN Co said wireless services like Starlink were threatening the viability of its business.

“The extent of competition and substitution risk means that NBN faces substantial revenue sufficiency risk,” it said at the time. “The consequence of this is that NBN faces the risk of being unable to generate sufficient cashflows to sustain its business and continue to invest in the network to meet its policy obligations and the needs of end-users.”

Coalition Senator Sarah Henderson warned the NBN Co executives last week,saying Musk was “running rings” around NBN Co. But the company assured the parliamentarians that Sky Muster would not become obsolete. Rue and Williams said the upgrade to the fixed wireless network would free up more capacity on Sky Muster for customers.

But another industry source was more cynical about the NBN’s prospects saying:“Low earth orbit satellites are eating NBN’s lunch and NBN’s only response is to raise its prices.”

NBN Co is facing pressure on all fronts from the telecommunications sector,which has widely rejected a proposal sent by the network to the competition regulator that would ultimately lead to price rises on key internet plans.

Telstra chief executive Vicki Brady said at the company’s half-year financial results that she will have no option but to lift consumer internet prices unless NBN Co is sent back to the drawing board with its latest wholesale pricing proposal. A submission from TPG Telecom to the Australian Competition and Consumer Commission,said it would also have no choice but to raise prices.

“Consumers who are not able to afford these price increases for the most basic NBN service,or cannot afford to upgrade...will be forced to either disconnect from the NBN or choose an alternative means to obtain connectivity,” TPG Telecom said.

Rue toldThe Australian Financial Review earlier this month he would not change the pricing proposal,known as a Special Access Undertaking (SAU),which outlines discounts on the NBN’s fastest speeds,but proposes a monthly increase of about 10 per cent on the NBN’s most popular plan,the 50Mbps option.

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