NBN Co posts loss of nearly $1 billion

Outgoing chief Mike Quigley walks away with more than $2 million

NBN Co has posted a loss of nearly $1 billion in the last year – well below the projected $1.3 billion loss it forecast in its corporate plan.

The 2012-2013 annual report has revealed revenue of $17 million, an increase of $15 million from the prior year, reflecting an increase in activations across fibre, fixed wireless and satellite services.

The revenue, generated from 70,100 active premises, was $37 per user, per month, while actual revenue was marginally lower than forecast in the corporate plan, according to the report.

Operating expenditure for the year($749 million) was also lower than the projected $1 billion which reflected delay in the rollout of the NBN and cost savings in the interim satellite service fixed wireless managed service and timing on disconnection payments to Telstra.

During the year the company spent a $1.5 billion on network asset for the construction of the transit, fibre satellite and fixed wireless access networks.

This was also below projected forecasts of $3.1 billion due to construction delays.

The company had $1 billion in cash and investments following government-funded equity injections of $2.4 billion during the year.

This again was lower than expected due to the “slower than ancticipated rollout of the fibre”.

The report also revealed outgoing chief executive Mike Quigley took home more than $2 million dollars for the year, while chief operating officer Ralph Steffens was paid more than $1 million, head of corporate and commercial Kevin made $940 and recently replaced head of quality Mike Kaiser was paid $590,000.

NBN Co’s head count at 30 June 2013 was 2,808 comprising 2,745 employees, 12 contractors and 51 labour hires.

According to Quigley, 1,115,000 premises had reached construction, commenced or completed and the number of Fibre premises passed in the period was 207,500.

“The total number of families and businesses with NBN services rose to 70,100: a fourfold increaseover the period," he said.

"Of these, 33,600 were connected to the Fibre Access network across brownfields and greenfields locations: up sevenfold,”

Communications minister Malcolm Turnbull and finance minister Mathias Cormann questioned the figures in a letter which accompanied the report as it was tabled in parliament.

"In several cases this information is expressed in a form, or measures a concept, specific to the previous Government's policies," Turnbull and Cormann said.

"However, in the view of the current Government, this does not necessarily provide a meaningful indicator of progress.

"Plainly there is substantial room to improve the quality and transparency of NBN Co's reporting."

The NBN rollout is set to change significantly under the Coalition government’s alternative Fibre-to-the-Node plan.

It is now conducting a strategic review process, which will involve wholesale audit of the rollout to incorporate the preferred Fibre-to-the-Node technology.

The report is due in december.

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Tags Mike KaiserNBN co 2012-13 annual reportMalcolm Turnbullfibre to the nodefibre to the premisenbn coMike quiquleyMathias CormannNBN

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