NBN Co triples revenue, boosts run rate

NBN Co CEO Bill Morrow has said that the company is on target to meet its full-year goal of having over 1 million Australian premises able to connect to the National Broadband Network.

NBN Co almost tripled its revenue in the second half of 2014, with 322,000 customers connected to the National Broadband Network (NBN) at the end of December.

The government-owned company responsible for rolling out the NBN reported (PDF) on Thursday AU$64 million in revenue for the half, up from AU$22 million in the same time in 2013.

As of the end of last year, NBN Co had 748,000 serviceable premises, with 322,000 customers with an active service. The company made 195,934 premises serviceable in the half, and connected 111,763 premises across the different technologies.

There had been a shift away from the fastest 100Mbps plan, with 19 percent of customers on the highest plan, compared to 38 percent on the 25Mbps/5Mbps plan, and 38 percent on the 12Mbps/1Mbps plan. A total of 4 percent of premises are on 50Mbps/20Mbps and 1 percent of premises are on 25Mbps/10Mbps.

Average revenue per user increased AU$3 to AU$39 in the half.

Operating expenses were up AU$62 million to AU$562 million in the half. NBN Co CFO Stephen Rue said this was largely due to customers migrating from the Telstra network to the NBN.

NBN Co made AU$446 million in cash payments, and capital expenses were AU$1.433 billion, most of which was spent on the construction of what NBN Co is now calling "fibre to the x", meaning fibre to the premises, fibre to the node, and fibre to the basement. This cost sat at AU$797 million for the half.

NBN Co has recalculated the cost per premises passed, and said that to date, the cost per premises is AU$4,316 for existing premises, AU$2,780 for new housing estates, and AU$3,637 for fixed wireless.

On the fixed-wireless network, NBN Co connected 217 sites, and built 157 in the half.

Morrow said that the fibre-to-the-node trial is continuing on schedule, with commercial products due in the second half of this calendar year. NBN Co also recently conducted a speed test on hybrid fibre-coaxial (HFC) using DOCSIS3.0, and achieved speeds of 376Mbps down, 49Mbps up, Morrow said.

The CEO said that the company is on track to meet its goals for the end of this financial year.

"We are off to a good start, but that doesn't mean we won't have issues and challenges in front of us," Morrow said.