NBN pulls in AU$2b revenue so far for FY19

For the first nine months of FY19, NBN has reported AU$2 billion in revenue and negative AU$808 million in EBITDA.
Written by Corinne Reichert, Contributor

Australia's National Broadband Network (NBN) company has quietly reported its third-quarter results, revealing an approximate 50% improvement across both revenue and earnings for the first nine months of FY19.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) for the quarter to March 31, 2019, improved by 15% to negative AU$331 million, and for the nine-month period by 54% to negative AU$808 million.

NBN's quarterly revenue was up by 42% to AU$740 million, and for the first nine months by 45% to just over AU$2 billion.

NBN made over AU$600 million in revenue each from fibre to the node (FttN) and connectivity virtual circuit/network-network interface (CVC/NNI); AU$377 million from fibre to the premises (FttP); AU$130 million from hybrid fibre-coaxial (HFC); AU$69 million from fixed-wireless; AU$36 million from satellite; and AU$18 million from fibre to the curb (FttC).

Five million premises have now been activated across the nation -- 2.6 million on FttN; 1.3 million on FttP; 666,521 on HFC; 276,068 on fixed-wireless; 138,384 on FttC; and 94,911 on satellite -- with 10 million premises ready for service and 8.8 million ready to connect.

Of all NBN users, 58% are now sitting at speeds of 50/20Mbps or above, while average revenue per user (ARPU) is still sitting at AU$45 per month.

So far for the financial year, NBN has spent AU$4.3 million on capex, split between AU$1.2 million on its HFC network as frozen connections begin to come back; almost AU$1 million on FttC and FttN; AU$410,000 on common capex; AU$316,000 on fixed-wireless; AU$289,000 on FttP; AU$175,000 on the transit network; and AU$56,000 on its satellite service.

Read also: Labor faces reality on NBN but the dream died long ago

Cost per premises (CPP) to connect is now at AU$4,401 for FttP brownfields; AU$3,811 for fixed-wireless; AU$3,089 for FttC; AU$2,498 for HFC; AU$2,265 for FttN; and AU$2,196 for FttP greenfields.

Speaking to ZDNet during the first-half financial results call in February, NBN CEO Stephen Rue told ZDNet the company remains on track to become cash-flow positive in FY22, adding that one way in which it is looking to improve speeds and capacity is via 5G on its fixed-wireless network.

"I'm satisfied that both the replacement costs of our assets and the future economic value of the company is such that we are satisfied with the accounting ... it is really important that NBN has a very strong business model; it's important that NBN has cash flows to enable us to continue to invest in the network, to continue to meet consumer demands, to continue to adjust as technology requirements adjust," Rue said.

"There's no doubt that the primary purpose of NBN was to create economic and social benefits to all Australians, and that's what the conversation needs to move to.

"How can NBN as an organisation contribute enormously to people's lives? Contribute to the economy? Contribute to regional Australia? Contribute to the way that kids can get educated? To improvements in our healthcare services? To ensure that entrepreneurs can stay in Australia, that people can build their small businesses? To ensure that women are able to become more involved in the economy, that women are able to set up businesses and be successful? That's what NBN is about, and for that we need strong cash flows."

Last month, the Australian Telecommunications Industry Ombudsman (TIO) also said complaints about the NBN had halved for the six months to December 2018, sitting at 61,000 made between July 1 and December 31, 2018.

Regardless of which party wins the federal election later this month, the immediate makeup of the NBN will stay the same, with much of the build already completed and contracts signed.

However, Shadow Communications Minister Michelle Rowland has said a Labor government will undertake an "immediate" review into the economics of the NBN and adopt a "reasonable approach" for future co-funded fibre upgrades on the FttN footprint, as well as previously saying it will create a NBN service guarantee if elected.

"Undertake trials of fibre upgrades to validate costs and assess co-investment mechanisms to responsibly deliver targeted upgrades over the medium term," the Labor plan states.

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