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NBN delivers boring, solid result for 2015/2016
Tuesday, 16 August 2016 12:59

nbnTM, the entity building and operating Australia's National Broadband Network, has delivered a pretty dull set of annual results.

The headline numbers are straightforward: there are now 1.1 million active customers (compared to 486,000 last year), and ready-for-service premises hit 2.9 million.

Revenue is up to AU$421 million, and average-revenue-per-user (ARPU) is $43 per month (up seven per cent).

Losses have also risen because of the capex needed to build the network and because of rising subscriber costs.

For the first time, the company has broken out its subscriber costs, which it say were $193 million in financial year 2015, but rose to $582 million in 2016.

That sum plus capex contributed to a 39 per cent increase in EBITDA (earnings before interest, tax, depreciation and amortisation) loss to $1.57 billion.

Vulture South notes with interest the large rise in the cost per active subscriber: it was $327 in 2015, but $529 in 2016, up by 61 per cent. A big part of this will be from the skyrocketing download levels, already 112 GB per user per month and expected to be close to 200 GB by the end of this year.

With the fibre-to-the-node (FTTN) network switched on, 2016 ended with nearly 120,000 customers; fibre-to-the-premises (FTTP) more than doubled to nearly 823,000 customers; fixed wireless also raced ahead to more than 117,000, HFC got its first 10,000 customers, and satellite was pretty much static, adding around 500 customers to 38,764.

CEO Bill Morrow told the earnings call hybrid fibre-coax (HFC) networks is carrying traffic on both the old Telstra and Optus networks.

Fibre-to-the-premises (FTTP) capex started its slide towards zero, falling more than $600 million to $1.08 billion. The networks to carry the bulk of the country by the time the network's finished in 2020 took the bulk of the 2016 outlays: $448 million on HFC, and $1.67 billion on Fibre-to-the-node (FTTN).

HFC will rise, and part of that will be the ongoing rejig of the networks to DOCSIS 3.1: Morrow said the company will only be delivering DOCSIS 3.0 modems for a few more months, with new kit to start arriving in 2017.

The only thorny question put to Morrow is one he's not yet ready to answer: how does nbnTM continue when the government turns off its capex tap?

The $9 billion still to come from Canberra will keep the operation going through to the end of the current financial year, Morrow said, giving nbnTM time to work out whether it's seeking another source of equity or debt funding. ®

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Source: http://bit.ly/2b1ezyG