Australia's National Broadband Network (NBN) company has announced revenue almost doubling during the 2018 financial year, growing by 98 percent to AU$1.978 billion from last year's AU$1 billion, with 99 percent of the nation now in design, construction, or complete.
Earnings before interest, tax, depreciation, and amortisation (EBITDA) sat at negative AU$2 billion, a 15 percent improvement on last year's negative AU$2.4 billion, while average revenue per user (ARPU) rose from AU$43 to AU$44 per month.
Revenue from every technology grew thanks to increasing customer numbers, with AU$536 million from fibre to the node (FttN), up from AU$172 million; AU$618 million from CVC/NNI, up from AU$299 million; AU$444 million from fibre to the premises (FttP), up from AU$369 million; AU$120 million from hybrid fibre-coaxial (HFC), up from AU$13 million; AU$70 million from fixed-wireless, up from AU$50 million; and AU$30 million from satellite, up from AU$19 million.
As of June 30, NBN had 8.1 million premises ready for service, 7 million premises ready to connect, and 4 million active premises. Active end users numbered 2 million on FttN, 1.2 million on FttP, 414,703 on HFC, 240,084 on fixed-wireless, and 90,327 on satellite.
On NBN's previously announced 5G trials with Ericsson in Melbourne, NBN CEO Bill Morrow on Thursday told ZDNet that it is important to continue trialling new technologies.
"5G I think has a lot of efficiency improvements in the spectrum that came out in the testing," the outgoing CEO told ZDNet.
"That efficiency in spectrum could be either translated into higher speeds available for end users, or more flexibility at the larger number of devices that could be supported within that particular cell or tower; that's what we're seeing."
With regards to the ACCC's decision to place competition limits on the 5G spectrum auction in November that will prevent NBN from taking part, Morrow told ZDNet that the company is disappointed but respects the decision.
"I am disappointed to say that that decision is already taken by the ACCC that we will not be participating in the upcoming auction, and we will manage accordingly," he told ZDNet.
"That is a right that they take, and we understand and respect that, and will look to evolve our network in other ways."
With NBN last week launching DOCSIS 3.1 across some parts of the HFC network to improve capacity and speeds, Morrow said the company's focus is currently on improving customer experience rather than offering gigabit speeds.
"NBN company is a wholesale operator, and we want to offer products that our retailers will sell to the end users, and while ultra-fast speeds would be great to have on offer, we simply do not see the demand for these services to justify the resources required to make them commercially available, at least right now," Morrow explained.
"To date, end-user premises on the gigabit-per-second speed tier make up just 150 premises out of the over 4 million that are currently using the network. We have instead decided to funnel our resources towards our key priorities of completing the rollout of the network, and of our continued efforts to improve customer experience."
Morrow also revealed that NBN is close to adding G.fast to the FttC network.
"I'm delighted to say that we are close to ending the testing phase, and will shortly install our first G.fast-enabled DPU on this FttC network," Morrow said during the financial results call.
"We will be one of the first operators in the world to take this step on FttC. What we are doing here is preloading the NBN network to be able to meet the bandwidth demands of the future with G.fast technology. It will enable gigabit-per-second speeds over copper lines, with the vast majority of the one and a half million premises on the FttC network to be G.fast-enabled by the year 2020.
"However, as with DOCSIS 3.1, we will not be offering those ultra-fast speeds on the FttC network just yet. As I said, the consumer demand just simply is not there at this point in time. But on HFC and FttC, we will have the ability to make those speeds available in the future when the demand does come."
According to the FY18 results report, across NBN's fixed-line network, the highest number of users were on the 50/20Mbps speed tier as of June 30, with 37 percent on these speeds, up from just 4 percent this time last year. During the financial year, the percentage of premises on 25/5Mbps dropped significantly, from 53 percent down to just 22 percent. Customers on the 12/1Mbps speed tier stayed at 29 percent, 25/10Mbps stayed at 1 percent, and 100/40Mbps fell from 13 percent to 11 percent.
On fixed-wireless, 74 percent were on the 25/5Mbps speed tier, 17 percent on 12/1Mbps, and 9 percent on 50/20Mbps. On satellite services, 68 percent were on 25/5Mbps speeds and 32 percent on 12/1Mbps.
During the year, NBN spent AU$1.6 billion capex on FttN; AU$1.3 billion on HFC amid the cease-sale; AU$827 million on FttC; AU$715 million on common capex; AU$451 million on the transit network; AU$353 million on fixed-wireless; AU$350 million on FttP; and AU$72 million on satellite.
As of June 30, cost per premises to connect was highest on FttP brownfields, at AU$4,401, followed by AU$3,757 for fixed-wireless, AU$2,412 for HFC, AU$2,255 for FttP greenfields, and AU$2,244 for FttN.
After focusing on improving customer experience, Morrow reported average network bandwidth congestion per week per service of 28 minutes, up slightly from June's 25 minutes but down significantly from the five hours and 23 minutes reported in June 2017. Fixed-line network congestion sat at 0.036 percent, with network availability of 100 percent.
Faults per 100 connected homes and businesses is now 0.9, down from one this time last year, and NBN said it is meeting fault restoration times agreed with retailers 91 percent of the time, up from 70 percent last year.
During the financial year, NBN also launched its FttC network, relaunched its HFC network, introduced virtual access to its points of interconnect, and announced plans for the NBN Business Satellite Service for 2019.
Fixed-wireless wholesale pricing
After NBN CFO Stephen Rue on Wednesday night revealed NBN's new wholesale fixed-wireless pricing -- AU$45 for existing customers and AU$65 for new customers on the 50/20Mbps speed tier -- during a joint standing committee hearing, Shadow Communications Minister Michelle Rowland accused NBN of charging regional users higher amounts for the equivalent services available in metro areas.
"A regional customer could pay 44 percent more than someone in the city for the same 50Mbps speed under this plan," Rowland said.
In response, Communications Minister Mitch Fifield on Thursday argued that this is not the case.
"This will not occur. NBN engages in ongoing consultation with retailers about products and pricing. NBN has responded to retailers by introducing new products and lower prices on a number of occasions," Fifield said.
"NBN is embarking on a fresh round of product consultations but have made no decisions. NBN offers equivalent pricing on comparable fixed-line and fixed-wireless products. The government will ensure that this continues."
Morrow told media during the results call that the fixed-wireless pricing is still in consultation with industry, adding that whatever product NBN does go ahead with will take nine months to bring to market.
"This was meant for nothing more than a consultation to say, 'how do you feel about that?'" Morrow said.
"Looking at the reaction behind this ... I'll just take it off the table right now, so we won't do that for the interim product. We'll work with the RSPs on consultation for other means to work through this interim to work out how we can get to that max product and still allow those RSPs to convert their CVCs on the fixed-line technology.
"So consider the AU$65 price for new 50-meg customers on fixed-wireless off the table. Again, it's a consultation, not a decision."
In an effort to combat the fixed-wireless congestion, NBN last month made changes to its network design rules, reducing the number of premises able to connect to each fixed-wireless cell, as well as updating the maximum bandwidth capacity available.
NBN in May revealed in response to Senate Estimates Questions on Notice that it is targeting fixed-wireless congestion at priority cells where speeds are less than 3Mbps during peak periods, with nine towers targeted at the end of November.
Recent NBN Coverage
- NBN announced new fixed-wireless pricing
- Labor pushes amendments to 'highly regrettable' NBN subsidy scheme
- ACMA goes to tender to test NBN modems
- NBN finally launches DOCSIS 3.1 across HFC network
- MyRepublic worst and Aussie Broadband best at delivering NBN download speed promises: ACCC
- Labor wants audit office review of NBN
- NBN will cause Australia to lead globally in mobile: S&P
- MyRepublic pays AU$25k NBN speed claims penalty
- NBN introduces virtual access to POIs
- Streaming media policy (Tech Pro Research)