The company rolling out Australia's National Broadband Network (NBN) has announced its financial results for the first quarter of 2016-17, reporting earnings before interest, tax, depreciation, and amortisation (EBITDA) of negative AU$501 million, a 49 percent increase from last year's negative AU$336 million.
Revenue for the three-month period was AU$181 million, a year-on-year increase of 148 percent from the AU$73 million announced this time last year, with CFO Stephen Rue attributing this to a growth in users.
A breakdown of revenue saw its fibre-to-the-premises (FttP) network contribute AU$83 million, fibre to the node (FttN) AU$18 million, fixed-wireless AU$11 million, satellite AU$3 million, and its connectivity virtual circuit (CVC) charge contribute AU$54 million -- more than double last year's AU$22 million -- as well as AU$12 million in other revenue.
Average revenue per user (ARPU) remained stable, at AU$43 per month, with NBN having received a total of AU$21.9 billion in equity from the Commonwealth government as of September 30.
NBN said it now has 3.23 million premises ready for service (RFS), a 134 percent increase from a year ago: 1.42 million premises on FttP; 926,624 on FttN; 27,506 on hybrid fibre-coaxial (HFC); 441,289 on fixed-wireless; and 415,518 on satellite. NBN CEO Bill Morrow in October told Senate Estimates that NBN would be adding RFS premises to its online rollout information by the end of the year.
"Our network footprint now reaches approximately 3.4 million premises. This equates to nearly one in three homes that can access the NBN network," Morrow told media on Tuesday, adding that 22,000 end users are added to the network on average every week.
"We have achieved this by leveraging the pre-built copper infrastructure, improving our processes, and empowering and motivating a skilled group of people."
Active users numbered 906,275 across FttP; 278,075 on FttN; 3,939 on HFC; and 137,041 on fixed-wireless. Satellite users grew from 38,764 to 52,943 over the quarter, with Rue saying it reflects the launch of its long-term satellite solution in April this year.
"We are seeing more and more end users transition from our interim satellite service to the new Sky Muster service," Rue said.
"In fact, at the end of September, there were 30,000 end users on our new Sky Muster service, and over 22,000 end users on the interim satellite service."
Morrow added that Sky Muster II services will launch "early next year".
NBN also expects to see the number of HFC users increase "significantly" during this financial year, according to Rue, despite the majority of Optus' HFC footprint instead now set to be connected by fibre to the distribution point (FttDP).
Speeds across NBN's fixed-line networks have remained low, with 51 percent of users -- 8 percent more than last year -- on speeds of 25/5Mbps; 31 percent on 12/1Mbps, down 4 percent from last year; 13 percent on 100/4Mbps, down 4 percent year on year; 4 percent on 50/20Mbps; and 1 percent on 25/10Mbps.
Across its fixed-wireless network, speeds are similarly low: 80 percent of users have chosen the 25/5Mbps speed tier, down 2 percentage points from last year; 17 percent are on 12/1Mbps, 1 percent more than last year; and only 3 percent are on 50/20Mbps.
Morrow said NBN is "satisfied" with user uptake of speeds, adding that it is up to retail service providers (RSPs) to offer packages with higher speeds and larger data caps, such as that being offered by new entrant MyRepublic as of next week.
The chief executive also said that the differences in data usage across network technologies, while higher on FttP, are "not massively material".
The CVC charge is now costing around AU$14, while the access virtual circuit (AVC) charge is approximately AU$29, Rue said.
"Data consumption has increased during the quarter in line with our expectations, following the introduction of the CVC dimension-based pricing discount in June," the CFO added.
Morrow last month predicted the CVC charge to drop to AU$10 eventually due to increased usage of data across the network.
"We continue to consult with the industry on all of our product decisions. CVC is no different. Our CVC pricing has come down more than 20 percent over the past 20 months, from AU$20 in February 2015 to AU$15.75 now," Morrow said during Senate Estimates in October.
Life-to-date capital expenditure jumped by half again over the year, from AU$10 billion in Q1 FY16 to AU$15.1 billion as of September 30, 2016.
A breakdown of capex by technology saw FttP fall from AU$400 million last year to AU$169 million this year as the rollout of that network technology slows down; FttN almost double, from AU$250 million to AU$490 million due to design- and construction-related activities; HFC jump from AU$82 million to AU$359 million due to both upstream and downstream design and construction activities; fixed-wireless drop by AU$2 million, from AU$89 million to AU$87 million, despite the acquisition of more than 98 wireless sites and the integration of 67 further base stations; satellite grow from AU$57 million to AU$99 million thanks to expenditure on its Sky Muster satellites, including the launch of the second satellite last month; transit increase from AU$46 million to AU$81 million; and common capex of AU$193 million, up from AU$139 million.
"This expenditure continues to reflect investment in the network, primarily in the design and build of our FttP, FttN, and HFC networks, as well as our ongoing investment in IT systems," Rue said.
"We continue to incur capex on the transit network as both end-user numbers and the demand for capacity grows. And finally, capital expenditure and common capex items of AU$193 million during the quarter to support the scaling of commercial services across all technologies, including the enhancement of business support systems, datacentres, and the national test facility."
Last week, NBN's regulatory documents revealed a capex spend during FY16 of AU$4.52 billion, more than double last year's AU$2.17 billion, with opex rising by 42 percent to AU$2.26 billion.
Quarterly operating expenses grew from AU$322 million to AU$430 million year on year, with Rue attributing this to expansion of the network and growth of the business, with subscriber costs almost tripling from AU$87 million to AU$252 million due to an increase in the number of customers migrating from Telstra and Optus to the NBN for total expenses of AU$682 million for the quarter.
Cost per premises across FttP brownfields was AU$4,410, down by 1 quarter on quarter; AU$2,547, down by AU$61, for FttP greenfields; AU$2,198, down by AU$59 for FttN; AU$3,674 for fixed-wireless, up by AU$115; and Morrow revealed that FttDP will cost between AU$2,700 and AU$2,800 per premises for the approximately 700,000 premises receiving the VDSL-powered technology.
For FY16, NBN reported EBITDA of negative AU$1.572 billion, a 39 percent increase from last year's negative AU$1.13 billion, on revenue of AU$421 million, a year-on-year increase of 157 percent from the AU$164 million announced in FY15.