Nbn exceeds targets for FY2017 but widens losses

Australia’s nbn says it has doubled homes covered, active users and revenues in its latest fiscal year, but still reported a wider operating loss due to a significant growth in expenses.

Reporting its annual results for FY2017, nbn said the number of premises ready for service almost doubled from 2.9 million to 5.7 million (above its FY2017 target of 5.4 million), while the number of homes and businesses with an active nbn service more than doubled from 1.1 million to 2.4 million (above its target of 2.3 million).

The increase in users helped revenues more than doubled from A$421 million to A$1 billion (beating its target of $900 million), while ARPUs remained steady at A$43.

However, nbn also reported that subscriber costs rose 170% year on year, while total expenses were up 71%, resulting in an operating loss of A$3.8 billion, compared to AUD2.45 billion in FY2016.

The company said its non-metro footprint is two thirds completed, while the metro footprint is one third completed, with a strong focus on construction in major cities scheduled for FY2018.

“Looking ahead, FY2018 is another significant construction year, and arguably the most visible and difficult as we rollout in high-density cities,” said nbn CEO Bill Morrow. “We are taking our learnings from the first half of the build, and applying them to ensure greater serviceability and efficiencies, particularly as we introduce Fibre-to-the-Curb into the mix.”

Morrow acknowledged that there have been complaints from consumers about the activation process, but said they were relative to the pace of the build and reach of the network. “We continue to improve our processes and integration with those of our delivery partners and retailers for seamless access to retail services on the nbn™ network.

Morrow added, “The vast majority of people using the nbn network are satisfied and we are certainly listening to those who are not.”

Morrow said that take-up has been both earlier and stronger than expected. “At the end of the 18-month migration window, of those who can connect to the nbn network more than 75% have done so. This is higher than nbn’s forecast take-up rate, with the majority of connections now occurring in the first six months of the migration window.”