Thursday, 14 May 2020 12:04

NBN Co exceeds quarterly revenue, activation targets, wins government praise Featured

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The Federal Government says national broadband network operator NBN Co has demonstrated “operational and financial resilience” during the initial phase of the COVID-19 pandemic and has welcomed the company’s “strong” 2019-20 third quarter results.

The comments follow NBN Co’s announcement of its third quarter results — exceeding its rollout, revenue and activation targets — with the company reporting that it made 670,000 residential and business premises Ready to Connect to the NBN in the third quarter alone, enabling a total of 11.2 million premises to order a service as at 31 March 2020 - with the build of the network "remaining on track" for completion of the initial rollout by 30 June 2020.

In its performance summary for the nine months to 31 March 2020, NBN Co reported:

  • NBN Co supports Australians through COVID-19 pandemic, offering internet retailers a 40% capacity boost for five months from March at no extra charge, and a $150 million financial relief package to help internet providers connect low-income families with home schooling needs and assisting small and medium businesses and households facing financial hardship
  • Total revenue of $2.8 billion, up 38% on last year
  • Earnings Before Interest, Tax, Depreciation and Amortisation (EBITDA) before subscriber costs of $1.25 billion
  • Monthly Residential Average Revenue Per User (ARPU) of $45, up from $44 last year
  • Business revenue of $496 million, up from $341 million last year
  • 11.2 million premises Ready to Connect and 6.9 million premises activated
  •  Increased customer demand drives achievement of 7 million connected premises two months ahead of the full year target.

NBN Co chief executive Stephen Rue said: “As we approach the final stages of the initial planned rollout and while we adjust to changes in how we live due to COVID-19, I am pleased that the universal access of the NBN across the country has meant that the vast majority of Australians who are in a position to work and study from home can do so.

“Whether it is school children using broadband to access online education; health clinics conducting telehealth consultations; or companies supporting more of their employees to work from home – the importance of investing in and maintaining a ubiquitous, high-speed, broadband network has never been clearer.

“Underpinning the critical services of online health and education, as well as supporting business, requires collaboration, and we at NBN Co are very thankful we work in an industry that has worked so well with each other, and the regulators, to keep the nation connected during this time.

“I was delighted to recently announce a $150 million relief package to assist residential and business customers through this period, and to confirm that for certain families there was financial relief to ensure their children would be able to continue their education online.”

NBN Co's results report reveals that demand for its services remained strong in the third quarter with 445,000 premises activated, lifting total activations to 6.9 million as at 31 March. Strong activation orders continued in April, resulting in NBN Co reaching its Corporate Plan 2020-23 target of seven million activations two months ahead of schedule.

ARPU increased from $44 to $45 in the nine months to 31 March 2020, driven by a rise in new and existing customers signing up to higher speed tiers. As at 31 March 2020, 68% of residential and business customers were connected via wholesale speed tiers of 50 Mbps and above.

Rue said that more than 80% of all new customers were signing up to speeds of 50 Mbps and above, and "pleasingly, since the start of April, as more Australians work, study and stream video entertainment from home, approximately 20% of new customers have chosen retail plans based on the 100 Mbps wholesale speed tier".

There is no doubt that COVID-19 has accelerated the data demands of the nation beyond what most would have forecast. But while COVID-19 may have changed data demand on our network, we have not changed our focus on providing great customer experience," he said.

"As more people recognise the importance of accessing high-speed, reliable broadband, we have seen customer experience sentiment recorded at its most positive. We are pleased to be supporting Australia through this period by providing up to 40% additional capacity to our retail partners free of charge, and providing increased data allocation to satellite services, for five months.”

Finance Minister Mathias Cormann said the government was pleased to see that NBN Co had achieved increases across all key financial and business metrics despite the impact of COVID-19.

“NBN Co achieved total revenue of $2.8 billion for the nine months to 31 March 2020, a 38% increase on its 2018-19 third quarter results,” he said.

“This is a significant step towards NBN Co’s Corporate Plan target of $3.7 billion for the full year.

“NBN Co has continued to make solid progress in the business segment. In the nine months to 31 March, business revenue has increased to $496 million, a 45 per cent increase compared to the previous corresponding period. These are outstanding results being delivered during a challenging period for our economy.”

And Minister for Communications, Cyber Safety and the Arts, Paul Fletcher, said NBN Co’s strong performance comes on the back of the record number of homes and businesses it has connected to the network during the quarter.

“NBN Co has been connecting up to 40,000 premises per week, with more than 68% of existing customers and 80 per cent of new customers choosing retail plans with peak speeds of 50 Mbps or higher. The increasing take-up of higher speed NBN plans shows the value that Australian households and businesses perceive in being able to access affordable, fast and reliable broadband,” Fletcher said.

“With more than 11.38 million homes and businesses now able to access an NBN service, NBN Co is within striking distance of its Corporate Plan target of completing the large scale network rollout with 11.5 million premises able to connect. There are more than 7 million active connections and in the three months to March 31, more than 445,000 new customers have been activated onto the network.”

“NBN Co has kept its focus on rolling out the network and connecting new customers even in the face of COVID-19. Despite many staff working from home, and field staff and contractors adopting new protocols, the company has maintained and indeed strengthened its operational and in turn its financial performance.

"NBN Co has played a critical role in keeping Australians connected and productive as we deal with the pandemic. The network has coped well with sharp jumps in traffic levels as many Australians have been working and studying from home. As part of responding to this jump in traffic levels, NBN Co has provided retail service providers with up to 40 per cent more network capacity at no additional charge through until July.”


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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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