The company rolling out Australia's National Broadband Network (NBN) has announced its financial results for the first half of the 2017 financial year, recording earnings before interest, tax, depreciation, and amortisation of negative AU$1.004 billion, a 45 percent increase from last year's negative AU$688 million.
NBN also reported a net loss of AU$1.83 billion on revenue of AU$403 million. The loss was a 47 percent increase over last year's AU$1.24 billion half-year net loss, with revenue more than doubling from the AU$164 million reported during the same period last year.
A breakdown of revenue saw fibre to the premises (FttP) deliver AU$173 million, up from AU$91 million year on year; fibre to the node (FttN) contribute AU$49 million; hybrid fibre-coaxial (HFC) add AU$1 million; fixed-wireless provide AU$22 million, up from AU$12 million; satellite contribute AU$8 million, up from AU$5 million; connectivity pricing deliver AU$122 million, more than doubling from last year's AU$51 million, which NBN attributed to demand for CVC capacity from retail service providers as consumers use more data; and "other" deliver AU$28 million in revenue, jumping from AU$5 million.
NBN CEO Bill Morrow labelled the financial results "impressive".
"Our increased productivity is enabling our retailers to market more services in more areas. Take-up of services over the NBN network is growing, as is average data use per home ... growing penetration is driving encouraging revenue growth," Morrow said.
"This strong growth is demonstrating the long-term sustainability of the company."
"We're doing this with a network design that allows for upgrades so that capacity can evolve along with consumer demand," Morrow said during the results call.
"Importantly, our aim is to build a sustainable business that can fund these upgrades itself without having to rely on the taxpayer."
Average revenue per user (ARPU) remained stable, at AU$43 per month, while total assets stood at AU$20.98 billion as of the end of the period.
Capex for the half year was AU$2.84 billion -- for a life-to-date capex of AU$16.4 billion, according to CFO Stephen Rue -- with FttP costing AU$294 million over the six-month period, down from AU$669 million; FttN costing AU$1.014 billion, up from AU$599 million; fibre to the distribution point (FttDP) costing AU$5 million already; HFC costing AU$631 million, over four times more than last year's AU$151 million despite the Optus HFC footprint being shifted to FttDP; fixed-wireless costing AU$177 million after the acquisition of 250 wireless sites during the period and the integration of an additional 144 base stations; satellite costing AU$158 million, up from AU$91 million due to the build and launch of Sky Muster II in October; the transit network costing AU$190 million, up from AU$109 million; and common capex costing AU$370 million.
Cost per premises (CPP) fell from AU$4,411 to AU$4,405 for brownfields FttP; decreased from AU$2,608 to AU$2,504 for greenfields FttP; fell from AU$2,257 to AU$2,172 for FttN; dropped slightly from AU$3,559 to AU$3,551 for fixed-wireless; and was AU$2,259 for HFC.
Premises ready for service (RFS) numbered 3.8 million as of the end of the period, a 129 percent increase from this time last year. This involved 1.5 million premises RFS on FttP; 1.3 million across FttN; 468,930 on fixed-wireless; 409,377 on satellite; and 158,938 on HFC.
As of Wednesday, however, Morrow said NBN had reached 4 million homes.
Activations numbered 1.6 million as of December 31, up 125 percent year on year, consisting of 969,670 activations on FttP; 449,258 on FttN; 154,078 on fixed-wireless; 64,943 on satellite; and 14,615 on HFC.
NBN again reported the majority of its users as being on the 25/5Mbps speed tier, with 51 percent of users on fixed-line services choosing these speeds, up from 45 percent during the same period a year prior. 31 percent were on the 12/1Mbps speed tier as of December 31, down from 33 percent; 13 percent were on 100/40Mbps, down from 16 percent; 4 percent were on 50/20Mbps, down from 5 percent; and 1 percent were on 25/10Mbps.
For fixed-wireless users, 79 percent chose the 25/5Mbps speed tier, a drop of 4 percentage points from the year previous; 17 percent were on 12/1Mbps; and just 4 percent were on 50/20Mbps.
The majority of users on the Sky Muster satellite service chose the maximum speed tier of 25/5Mbps, with 67 percent of satellite users on this, while the remaining 33 percent were on the 12/1Mbps speed tier.
With satellite users growing and NBN having to move 18,000 customers from the interim satellite service between October and the end of this month, Morrow provided an update on when Sky Muster II will begin bolstering the first satellite in providing services to the 3 percent of the Australian population reliant on it for broadband services.
"The final beams are being commissioned at the moment, and they're on track to begin contributing to the service very soon," Morrow said.
NBN reported that the Australian government contributed AU$3.5 billion in equity during the half year, with total government investment reaching AU$23.8 billion as of December 31. Rue referred to the government's commitment to continue providing equity funding to NBN, saying it will allow NBN to focus on rolling out the network rather than securing private funding.
"A AU$19.5 billion loan facility was secured from a government loan on commercial terms. The terms of the loan were informed by external credit ratings received by the company. The loan facility will be available from July 1, 2017, with the principle amount to be repaid by June 30, 2021," Rue said on Thursday morning.
"We are delighted with securing the funding so we can remain focused on building a sustainable business for the future."
NBN in August reported FY16 total EBITDA of negative AU$1.572 billion on revenue of AU$421 million after half-year results saw EBITDA of negative AU$688 million on revenue of AU$164 million.