NBN Co’s revenue increases, along with debt


Stephen Rue (NBN Company)

Credit: NBN Co

NBN Co’s revenue from commercial customers increased to $493 million in the first half of FY22, up 24% from $397 million in the first half of FY21.

Although it still represents only a fraction of the national broadband network (NBN) builder’s overall revenue, the adoption of business-grade services has helped boost the company’s total revenue. business at $2.5 billion for the six months through December 31, 2021, an increase of 12% over H1 FY21.

The result was supported by new customer acquisition and strong demand for high-speed broadband plans, NBN Co noted in its half-year financial report.

This is despite the network builder’s super-broadband NBN services of more than 100 Mbps down about 195,000 services in the September quarter of last year.

The company’s earnings before interest, taxes, depreciation and amortization (EBITDA), including subscription fees, were $1.5 billion in the first half, reflecting a $1.1 billion improvement compared to the corresponding period last year.

This was largely due to revenue growth and lower operating expenses and subscriber-related payments at Telstra and Optus.

Specifically, in the first half of FY22, NBN Co recognized $126 million in subscription costs to Telstra and Optus, compared to $809 million in the first half of FY21.

As previously stated, these subscription costs will continue to decline throughout the fiscal year and are expected to cease in fiscal year 23.

NBN Co’s all-important average residential revenue per user (ARPU) rate rose to $46 in the six months to December 31, 2021 from $45 in FY21.

The increase in residential ARPU was driven by customer demand, with more customers choosing or upgrading to higher speed tier plans, the network builder said.

As incomes rose, so did debt. NBN Co said it remains focused on raising $27.5 billion in bank debt and in capital markets by June 2024.

According to the company’s financial statements, its global borrowings, or group debt, at the end of the six-month period stood at $24.7 billion, $900 million – or 4% – from 23.8 billion dollars claimed as of June 30, 2021. .

The company’s private borrowings were $19.8 billion as of December 31, 2021, which includes new bank and capital market debt raisings of $8 billion in fiscal years 21 and 5 An additional $.6 billion in the first half of FY22, of which $900 million was an increase in available bank debt. facilities.

However, as of December 31, 2021, the company had repaid $12.1 billion of its $19.5 billion loan from the federal government and remains on track to repay the outstanding balance of $7.4 billion.

At the same time, the company said its weighted average cost of drawn debt continued to decline and was 2.29% as of December 31, 2021.

Meanwhile, capital expenditures in the first half were $1.16 billion, with network upgrades, connection costs and investments in new commercial developments and products making up the lion’s share of these. expenses.

“Our strong capabilities and predictable cash flows have earned the trust of the domestic and international investment community and as a result we have successfully raised $19.8 billion in private debt and borrowings to date at very competitive interest rates,” said Stephen Rue, CEO of NBN Co.

“The strength of our business model has enabled us to advance $4.5 billion in network investments to help meet future customer needs and accelerate Commonwealth loan repayment.

“We are pleased to confirm that we are on track to deliver full-year financial results consistent with the guidance provided in the FY22 business plan.”

At the same time, NBN Co connected approximately 190,000 additional premises in the six months to December 31, 2021 to close the half-year with 8.4 million premises connected to the network.

As of December 31, 2021, 76% of residential and business customers were connected to plans based on wholesale NBN speed tiers with peak download speeds of 50 Mbps and above, up from 70% twelve months prior.

NBN Co said it was making “good progress” on its $4.5 billion network investment plan, which aims to make wholesale speed tier NBN Home Ultrafast capable of reaching speeds wholesale download rates from 500 Mbps to almost 1 Gbps, reaching up to 75% of premises on the fixed network, or approximately 8 million premises, by the end of 2023.

Additionally, the company said it is on schedule for the commercial launch of the fiber-to-the-node (FTTN) to fiber-to-the-premises (FTTP) upgrade program, which will see first-time locals upgrade their orders for NBN Home Fast, NBN Home Superfast and NBN Home Ultrafast Services from the end of March 2022

“NBN Co is delivering on its promise to its customers and delivering on the company’s goal of increasing Australia’s digital capability,” Rue said.

“We have built a strong, resilient, secure and stable network that has proven itself, particularly over the past two years, as customers in metropolitan, regional and remote areas of Australia have relied on the network to work and studying from home, gaining access to vital services such as telehealth appointments, shopping, connecting with friends and family, and entertainment,” he added.

The latest results follow a period of growing criticism of NBN Co from entrepreneurs and the country’s biggest telecom operators.

In September last year, Australia’s five biggest telecom operators rallied against what they called “insufficient” COVID-19 relief, with Vocus going so far as to accuse the broadband builder of ” take advantage” of the recent crisis.

A month later, NBN Co bowed to telecommunications industry pressure over its credit relief calculation following the recent COVID-19 outbreaks.

In August 2021, NBN Co revealed its efforts to consolidate its partner portals, which it said were already underway, with the move coming just months after it admitted it had “problems” with its field service application, resulting in a labor uproar early last year. .

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