Monday, 11 December 2017 05:58

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

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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."

NBN 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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Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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