NBN revenue grows 154 per cent

Losses, revenue up in Q1 results

With NBN reporting $71 million of telco revenue for Q1 FY16, it earned almost as much in the quarter ending 30 September as it did for the five years leading up to FY14, the company's executives told a results briefing today.

Revenue was up 154 per cent compared to Q1 FY15.

"This has been an important quarter in progressing the NBN network rollout," said Bill Morrow, NBN's CEO.

Increased service activations and a growth in average revenue per user (ARPU) were factors driving revenue, said the company's CFO, Stephen Rue.

As of 30 September, there were 610,712 active services on the network, up from 266,984 at the end of Q1 FY15.

The majority of those services are fibre-to-the-premises (FTTP) connections (there were some 37,000 satellite services, 67,000 fixed wireless services, 505,000 FTTP services and 375 fibre-to-the-node services).

At the end of the quarter there were 1,383,375 premises able to order NBN services.

Online streaming services have helped boost usage, with the average per user downloads for September reaching 110GB.

"This is nearly 70 per cent up year on year," Morrow said.

This growth was reflected in the increase of ARPU which increased 11 per cent compared to Q1 FY15 to $43.

NBN registered an increase in operating expenses to $409 million, up 46 per cent from the prior comparable quarter, Rue said.

"These costs have increased as expected and are in line with the ongoing build of the network and the growth in customer disconnection and migration costs, as more and more customers migrate from the Telstra and Optus networks," the CFO said.

This resulted in an EBITDA loss for the quarter of $336 million, compared with $252 million for the comparative period, he added.

"All early stage infrastructure companies require significant upfront investment and we are no different, incurring $1.1 billion in capex during the quarter, bringing total assets to $14.2 billion," Rue said.

The capex primarily related to the design and build of FTTN, FTTP and hybrid fibre-coaxial (HFC) networks as well as investments in IT systems to support the business, including the launch of FTTN and HFC technologies, the CFO said

During the quarter NBN received $1.3 billion in equity from government, taking total equity funding to date to $14.5 billion out of total government commitment of $29.5 billion.

Morrow said milestones in the quarter included the release of NBN's new corporate plan, the launch of NBN's three-year construction plan, NBN signing a second round of contracts with construction partners, the commercial launch of fibre-to-the-node (FTTN), and the launch of NBN's first satellite, Sky Muster.

"With HFC users now in trial, this is the first results call where all our fixed line technologies have end users connected," Morrow said.

"This along with our first fully integrated corporate plan, a public three-year construction plan and continued good progress across all measures gives us confidence in our ability to hit our full year targets."

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