Monday, 12 February 2018 11:37

NBN Co posts record $2.4 billion loss for first half Featured

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NBN Co, the company rolling out Australia's national broadband network, has reported a record loss for both a quarter and a half-year,  with the company losing $1.13 billion for the three months October to December 2017 and running up a $2.4 billion loss for the first six months of financial year 2018.

The latest accounts for the six months to the end of December 2017 were announced on Monday, with the company's chief executive, Bill Morrow, saying that the company was on track for a scheduled end to the rollout by 2020 as laid out earlier.

According to NBN Co, 6.1 million premises are now ready to connect, and there are 3.4 million active services.

morrow results dec17

Bill Morrow presenting the NBN Co's results for the half-year on Monday.

“Revenue surged by 121% from $403 million at 31 December 2016 to $891 million at 31 December 2017,” NBN Co reports. The company reported losses of $4.24 billion for the full-year 2017 and $2.75 billion for the full-year 2016.

But despite the increasing cost to the public purse, Morrow told analysts and media that the company had demonstrated its ability to deliver on the build and it had “all been done” within forecasts, sounding confident it would be completed, on budget, by 2020.

Describing the last six months as one of the “most significant deployment periods in the company’s history”, Morrow said, “There’s been a significant program of activity (in the last six months) and “we’re seeing less complaints and next week we’ll speak about more of progress and how we keep track of initiatives”.

nbn dec17 finance

“With industry and retail service providers, we’re confident we will get this right, that’s what customers expect. Our priority network connection are not slowing down. We’re on track to completion in 2020.

“We’ll deliver the network as quick as possible at the least cost to taxpayer,” Morrow promised.

For the six months there was a slight lift in the average revenue per user on the NBN from $43 to $44.

The company was buoyant on progress in getting the NBN working for residents and businesses nationally, as it reported activations continued to grow, with more than 940,000 new premises signing up to services and almost 3.4 million activated in total.

nbn dec17 cost

“As activations grew across the network, revenue surged by 121% from $403 million at 31 December 2016 to $891 million at 31 December 2017.

"Further company highlights include: positive results from the first fibre-to-the-curb customer trials, release of new satellite broadband packages and an increase in wholesale Sky Muster data limits, signing a new Wholesale Broadband Agreement with retail service."

NBN Co maintains it is committed to improving the end user experience and notes its launching of a number of initiatives during the 2018 half year, including two “significant decisions” to improve experience for end users who are active on the access network.

“NBN Co announced discounts on its top-tier wholesale internet access plans in a move to encourage retailers to provide speeds to meet the needs and expectations of end users. The company is already seeing less congestion on the network and increased take-up of wholesale plans based on the 50/20 Mpbs speed tier,” the company notes.

“In November 2017, the company also paused all activations on the HFC network to conduct necessary upgrades to improve quality of service. The pause on sales will be in effect until this fieldwork is complete.

nbn dec17 speed tiers

“These two initiatives form part of NBN Co’s broader program of activity targeting end user customer experience including: improvements to home and business installations, new fault detection and resolution processes, enhanced case management timelines with retailers, and additional support and management for business customers.

“While customer experience is a priority, NBN Co remains on track to complete the initial build by 2020 and the peak funding forecast continues to be consistent with guidance provided in the Corporate Plan 2018,” Morrow said.

“In the six months, we’ve delivered on some of our most ambitious targets that bring us closer to our 2020 goals. As at 31 December 2017, more than 95% of households and businesses are in design, construction or are already able to order a service over the NBN access network.

“While that is success we can be proud of, we’ve demonstrated that we won’t pursue those objectives singlemindedly at the expense of customer experience."

Photo and graphics: courtesy NBN Co

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Peter Dinham

Peter Dinham - retired and is a "volunteer" writer for iTWire. He is a veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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