NBN Co 'on track' for FY forecast as it posts H1 sales increase; outlines latest FTTN upgrades

10 Feb 2021

Australia’s NBN Co has published its financial results for the first half of its current financial year (which ends 30 June 2021), saying its performance in the period puts in on track to meet its full year forecast. For the six months ended 31 December 2020 NBN Co’s turnover reached AUD2.26 billion (USD1.8 billion), up from AUD1.81 billion in the corresponding period a year earlier. Of the total, AUD1.77 billion was generated from residential subscribers, up from AUD1.40 billion in H1 2019/20, while turnover from business users increased by 25% year-on-year, to AUD397 million.

EBITDA before subscriber costs –i.e. compensation payments to Telstra and Optus for taking over their infrastructure – increased by 59% y-o-y, reaching AUD1.23 billion, with the company reporting an AUD1.1 billion improvement in EBITDA, which increased to AUD424 million from the negative EBITDA of AUD663 million reported by NBN Co in H1 2019/20. In terms of other headline financial indicators, NBN Co reported total capital expenditure of AUD1.42 billion in the period under review, down significantly from AUD2.52 billion a year earlier.

In operational terms, NBN Co reported that the number of active premises on its network had increased to 7.930 million by 31 December 2020, up from 6.440 million a year earlier, with the largest proportion of these – 3.182 million, up from 2.877 million – connecting via fibre-to-the-node (FTTN) technology. The operator confirmed continued noteworthy growth in HFC-based accesses, meanwhile, reporting 1.898 million premises active via that technology at end-2020, up from 1.388 million a year earlier. In terms of the speeds taken up by customers, NBN Co said that 70% of users were served by a broadband connection offering 50Mbps/20Mbps download/upload speeds at the end of the reporting period, compared to 67% at end-2019.

Meanwhile, in separate but related news, NBN Co has outlined details of the second tranche of the 100,000 premises where it aims to upgrade its fibre infrastructure from FTTN to fibre-to-the-home (FTTH) technology. According to the company, the next targeted locations for the upgrade include a number of towns and suburbs in New South Wales, Victoria, Queensland, South Australia and Western Australia. Such work follows on from NBN Co’s October 2020 announcement in which it confirmed it had begun work on a programme to design and construct new fibre into communities currently served by FTTN. Under the programme, NBN Co aims to ‘progressively continue to select, design and construct new fibre extensions over the next two years’, with an ultimate aim of passing around two million premises by the end of 2023. The programme, meanwhile, is part of NBN Co’s AUD4.5 billion network investment plans, under which it aims to make its highest wholesale speed tiers available to around eight million premises by 2023.

Australia, NBN Co