Home Telecoms & NBN NBN HFC delay to cost $50m, company CFO says

NBN HFC delay to cost $50m, company CFO says

The postponement of HFC connections to the NBN by between six and nine months will mean a revenue hit of about $50 million and a possible delay in about $500 million of revenue, the NBN Co says.

The company's chief financial officer, Stephen Rue (below, left), told a parliamentary committee on Friday: "It depends on the length of time, of course, but if you take a six-month pause for the period to June 30, you're talking around about $50 million.

NBN Co, the company rolling out the national broadband network, announced in the last week of November that it would be stopping the connection of those who are allotted HFC from December 11.

"That's the impact on the revenue for the period to June 30. If the whole programme was delayed by six months, what we have, I think, is 1.9 million customers still to connect that we expect to connect," Rue told the committee.

"So, if all of those 1.9 million customers – and I don't think that's necessarily going to be the case – if they were all delayed by six months, you'd be talking about a $500 million delay in revenue."

stephen rue vertNBN Co announced on 27 November that households and businesses would have to wait between six and nine months longer for connections while the company fixed technical issues affecting the speed that the network can deliver.

Rue said that as the building of lead-ins and wiring in new areas would continue during what has been said to be a delay of six to nine months, the financial fallout would not be known for several months.

Commenting on the statement regarding the revenue hit, Labor's shadow communications minister Michelle Rowland and shadow finance minister Jim Chalmers said: "This outcome would require a further $500 million to be drawn down from a $1.7 billion taxpayer-funded contingency pool, which is repeatedly being used to patch-up (Prime Minister Malcolm) Turnbull’s multi-technology mess.

"This is yet another bitter pill for taxpayers and consumers who are being punished with a second-rate network that costs more and does less."

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Sam Varghese

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A professional journalist with decades of experience, Sam for nine years used DOS and then Windows, which led him to start experimenting with GNU/Linux in 1998. Since then he has written widely about the use of both free and open source software, and the people behind the code. His personal blog is titled Irregular Expression.

 

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