Wednesday, 27 May 2015 13:19

NBN shows steady growth - but more needed Featured

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The company rolling out Australia’s National Broadband Network had released its quarterly results, which show steady ‘linear’ growth.

CEO Bill Morrow says he is happy with the results, but says the company will have to move from linear to exponential growth rates if it is to achieve its target of connecting 8 million premises by 2020.

Highlights of the results (as at the end of March 2015):

  • 899,000 serviceable premises – “almost double 12 months ago”
  • 389,000 premises activated –“ more than 20% increase since December”
  • $106 million in telecommunications revenue for the nine months – “almost three times the corresponding nine months last year, and more than is previous life of the project.”
  • Weekly run rate of circa 12,300 serviceable premises – 73% increase from 12 months ago (12-week rolling average to 31 March 2015).
  • FTTN construction program expanded to cover an additional 200,000 premises (approximately 400,000 cumulative).

Morrow gave updates on each component of the ‘multi technology mix’ introduced by Communications Minister Malcolm Turnbull in 2013 (see pie chart). Most of currently connected premises use the fibre to the premises (FTTP) model originally proposed by the ALP Government, but FTTN (fibre to the mode) trials are now well advanced and will start to show up in the numbers later this calendar year.

The first of the NBN satellites will be launched later this year, if all goes well with launcher Arianespace. The brand name for the NBN satellites, which will replace the current poorly regarded interim system, will be Sky Muster, a name coined by six-year-old Bailey Brooks who won a recent competition to name the service. And there are now 2057 fixed wireless sites.

At the press conference announcing the results Morrow was asked if NBN had any interest in the Jabiru 1 satellite, which looks like being old by manufacturer Lockheed Martin Always after owner Newsat hit financial difficulties. “We’re always looking at options,” he said. “But we have had no discussions. We’ve talked a bit about it internally.”

He was equally non-committal about the possibility of NBN buying iiNet’s HFC assets, as it has Telstra’s and Optus’s. “If we can buy an asset that is cheaper than we can build ourselves we are always interested.” But again no more information.

In response to a question from CommsWire, Morrow says that NBN has a dedicated team looking at ways to get higher bandwidth out of copper, which serves as the final connection into FTTN NBN premises. He said it is constantly talking to vendors and other carriers about ways to improve the performance of copper, and gave as an example NBN’s recent discussions with UK carrier BT, which is employing the G.Fast technology to improve copper’s performance.

“The market for NBN services continues to grow with sizeable increases in serviceable premises, end users and revenue in the period,” said Morrow.

“Consistent with a company in build phase, and one that is laying the foundations for an escalation in rollout activity using a more flexible mix of technologies, NBN incurred $2.2 billion in capital expenditure in the period; an EBITDA loss of $785 million; and operating expenses of $893 million. 

“We are on target to achieving our full-year targets of around one million serviceable premises, around 480,000 activations and around $150 million in annual revenue. The recent repositioning of the NBN brand from that of a utility function to a visionary company that will deliver positive benefits for every Australian will also help materially drive activations and bring forward revenues.

“The next stage of the company’s development requires a step change in performance. Work underway puts us in a solid position to make that transition so we can meet our goal of a truly national broadband network that will drive a competitive and productive Australia.”

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Graeme Philipson

Graeme Philipson is senior associate editor at iTWire and editor of sister publication CommsWire. He is also founder and Research Director of Connection Research, a market research and analysis firm specialising in the convergence of sustainable, digital and environmental technologies. He has been in the high tech industry for more than 30 years, most of that time as a market researcher, analyst and journalist. He was founding editor of MIS magazine, and is a former editor of Computerworld Australia. He was a research director for Gartner Asia Pacific and research manager for the Yankee Group Australia. He was a long time IT columnist in The Age and The Sydney Morning Herald, and is a recipient of the Kester Award for lifetime achievement in IT journalism.

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