The National Broadband Network (NBN) company has published its Corporate Plan 2017, revealing a narrower peak funding range of between AU$48.6 billion and AU$54 billion.
Last year, NBN announced a funding range of between AU$46 billion and AU$56 billion.
"The peak funding range has narrowed, due to a reduced number of uncertainties, with the top of the range reducing from AU$56 billion to AU$54 billion," the Corporate Plan says.
Risks of reaching the peak funding amount include an increase in average revenue per user (ARPU); the take-up rate of services; operating expenses; changes in the activations profile for hybrid fibre-coaxial (HFC) and fibre to the node (FttN); capex changes such as HFC lead-ins and network costs, and FttN node costs; and interest rates.
NBN said it has adopted "three lines of defence" against these risks, which involve meeting the scale challenge; managing its partners; and dealing with competition, regulatory constraints, and revenue.
NBN has forecast its revenue to reach AU$0.9 billion in FY17, AU$1.9 billion in FY18, AU$3.7 billion in FY19, and AU$5 billion in FY20; earnings before interest, tax, depreciation, and amortisation (EBITDA) of negative AU$2.6 billion in FY17, negative AU$3.2 billion in FY18, negative AU$2 billion in FY19, and positive AU$0.7 billion in FY20; and cash flow of AU$9.2 billion in FY17, AU$10 billion in FY18, AU$6.6 billion in FY19, and AU$2.5 billion in FY20.
Capex is predicted to be AU$6.1 billion in FY17, AU$5.9 billion in FY18, AU$3.3 billion in FY19, and AU$1.9 billion in FY20; while opex is expected to be AU$2.1 billion in FY17, AU$2.3 billion in FY18, AU$2.6 billion in FY19, and AU$2.8 billion in FY20.
"The latest results, together with the corporate plan which we're releasing today, shows three things about the rollout of the NBN under the Coalition, under the change of management," said Communications Minister Mitch Fifield.
"And those three things are that the company has proven to Australia that it can meet ambitious rollout targets in pursuit of what is the biggest infrastructure project in the history of the nation; the second thing it demonstrates is that NBN does have a robust, stable, and transparent plan to build on the progress to date; and the third thing is that the multi-technology mix has proven to be the right decision seeing the NBN rolled out sooner, and at less cost to Australians."
Premises to be covered via each network technology, according to the Corporate Plan 2017, are between 2 million and 2.5 million, or 17 to 21 percent, by fibre to the premises (FttP); 5.1 million to 6.5 million, or 43 to 54 percent, by FttN, fibre to the basement (FttB), and fibre to the distribution point (FttDP); 2.5 million to 3.2 million, or 21 to 27 percent, by HFC; and 0.9 million to 1.1 million, or 8 percent, by satellite and fixed-wireless.
The base case shows that 2 million or 17 percent will be covered by FttP; 6.1 million or 51 percent by FttN, FttB, and FttDP; 2.8 million or 24 percent by HFC; and 1 million or 8 percent by fixed-wireless or satellite.
NBN is predicting premises ready for service (RFS) of 5.4 million in FY17, with 2.3 million activated as of the end of the financial year.
The RFS plan expects 1.1 million premises by FY17 and 1.2 million by FY18 on FttP brownfields; FttP greenfields to be at 0.4 million premises by FY17, 0.5 million by FY18, 0.6 million by FY19, and 0.8 million by FY20; FttN at 2.1 million premises by FY17, 4.4 million by FY18, 5.8 million by FY19, and 6.1 million by FY20; HFC to be ready for service at 0.9 million premises by FY17, 2 million by FY18, 2.6 million by FY19, and 2.8 million by FY20; fixed-wireless at 0.5 million premises by FY17 and 0.6 million by FY18; and satellite to be RFS at 0.4 million premises by FY17.
NBN's plan for premises activated shows FttP brownfields at 0.8 million premises by FY17 and 0.9 million by FY19; FttP greenfields at 0.2 million premises by FY17, 0.3 million by FY18, 0.4 million by FY19, and 0.5 million by FY20; FttN at 0.9 million premises by FY17, 2.1 million by FY18, 3.6 million by FY19, and 4.2 million by FY20; HFC at 0.1 million premises by FY7, 0.9 million by FY18, 1.5 million by FY19, and 2 million by FY20; fixed-wireless at 0.2 million premises by FY17 and 0.3 million by FY19; and satellite activated at 0.1 million premises by FY17 and 0.2 million by FY19.
While NBN has still not broken down numbers of premises to be covered by FttN, FttB, and FttDP, NBN CEO Bill Morrow told ZDNet that it is close on narrowing this down.
"We believe roughly about 30 percent of the nation is apartments, or what we call multi-dwelling units. Those are predominantly targeted to be fibre to the basement," Morrow told ZDNet.
"When it comes to the breakdown of FttDP versus FttN, FttDP is still within our trials. We were very encouraged by this technology, but we have not concluded it to know exactly what position it's going to have within the mix. I said previously that there are several hundred thousand candidates that should the technology work like we anticipate it will, and should we get the economics that we are expecting, then we will have that technology in place of FttN."
Meanwhile, the HFC footprint has reduced due to a higher cost in rolling it out than anticipated, with Morrow adding that some people are also better served by FttN in some previous HFC areas -- but that NBN is now confident that its mix and capex forecasts are accurate.
Cost per premises (CPP) has seen FttP brownfields expected to be AU$4,400; FttP greenfields cost AU$2,100; FttN cost AU$2,300; HFC cost AU$2,300; and fixed-wireless cost AU$4,600.
HFC has moved up in CPP because NBN had not yet had its contracts in place when it previously made the prediction, Morrow explained.
"We are fully funded for this entire financial year, and we are already in the process of securing external debt as we speak right now," Morrow added.
NBN last week announced its FY16 results, revealing earnings before interest, tax, depreciation, and amortisation (EBITDA) of negative AU$1.572 billion, a 39 percent increase from last year's negative AU$1.13 billion.
Revenue for the 12-month period was AU$421 million, a year-on-year increase of 157 percent from the AU$164 million announced in FY15.