NBN scales-up release of HFC premises after ‘pause’

Most ‘paused’ premises to be released by end of this month

NBN Co CEO Stephen Rue says the company will conduct a “significant release of optimised HFC premises over the next six months”.

Presenting the company’s half-year results today, the NBN Co chief executive said that as of the end of December some 70 per cent of Australian homes and businesses — around 8.1 million premises — were able to order an NBN service. A further 1.4 million premises were ready for service; essentially located in an area served by the new network but not able to order an NBN service.

The scaled-up release of hybrid fibre-coaxial (HFC) premises will help narrow the gap between premises ready for service and ready to connect, Rue said today.

NBN Co in November 2017 paused the sale of HFC services while it worked to address performance problems with the technologyThat decision had an impact on NBN Co’s revenue to the tune of $700 million, as well as incurred around $200 million in costs to fix the problems with the HFC network.

“By the end of this month, all the HFC premises that were subject to the sales pause in late 2017 are expected to be ready to connect again,” Rue said today. “The optimisation program has been a huge focus for the company and has led to significant improvements in the customer experience.”

NBN Co revealed today that by the end of December the cumulative cost per premises of HFC had grown to $2466, up from $2258 at the end of FY17.

Rue said today that in addition to releasing more HFC premises, NBN Co was continuing to scale up its deployment of fibre to the curb (FTTC).

In the six months to 31 December, the company’s capex hit $2.91 billion, up from $2.84 billion in the last half of 2017.

“The largest components were the HFC and FTTC networks, with total capex spends of $836 million and $674 million respectively,” Rue said. “This reflects the ongoing level of optimisation, construction and connection activities for both these technologies.”

NBN Co revealed that capex for fixed wireless grew to $204 million, up from $159 million in the prior comparable period, as the company seeks to address the performance of that technology.

Figures released today by the company show that fixed wireless performance in January 2019 dropped compared to the end of 2018, with 95.7 per cent of cells delivering at least 6 megabits per second in busy periods (NBN Co’s benchmark for wireless congestion). That’s down slightly from December 2018, when 96.6 per cent of cells were considered congestion free.

NBN Co registered a net loss after tax of $2.15 billion for the first half of its fiscal year, compared to a loss of $2.64 billion for the prior corresponding period.

Revenue was up 46 per cent to $1.3 billion, and the company for the first time registered positive EBIDTA of $213 million — if once-off subscriber costs paid to Telstra and Optus of $690 million are disregarded.

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