As the company building the National Broadband Network (NBN), took the wrappers off its first corporate plan, it revealed building costs would jump to $46 billion to $56 billion, up from the predicted $41 billion.
In it, the NBN stated it would be targeting $49 billion, which NBN CEO, Bill Morrow said was reasonable. It also involves a contingency of $4.6 billion for ‘unforeseen’ risks.
Some of the sensitivities it outlined included an increase in average revenue per user (ARPU); take-up rate, product launches and delays; changes in activations for profile for HFC and FttN and capex changes related to network costs and FttN node costs.
NBN did not reveal its profit figures and couldn’t exactly pinpoint when it would become a profitable entity.
EBITDA loss increased to $1.13 billion from $1.01 billion in the previous year. Operating expenses also grew to $1.29 billion up from $1.07 billion. ARPU went up from $37 to $40.
For this financial year, NBN received a total of $13.2 billion in equity funding. Total Government equity contributions are capped at $29.5 billion, which thereafter, the nbn would have to source extra funding from banks and the bonds market.
At the launch in Sydney, communications minister, Malcolm Turnbull, said the corporate plan had taken a year complete and the project was moving along quickly.
Morrow said it calculated the peak funding requirements and financial details for the next three to four years, where it anticipates revenue will reach $1.7 billion in FY18.
"Net loss is normal under a capital intensive business like NBN," Morrow said.
“We want eight million active end users on this network across the country by 2020. We identified five strategic imperatives that must be in place to do that and we’re delivering on that.”
Morrow said it was currently looking at external debt funding that will be addressed in FY17.
In FY15, NBN has more than doubled its telecommunications revenue from $60 million to $161 million.
The number of homes and businesses with an active nbn service also doubled from 210,000 to 486,000 and the number of premises that can now order an nbn service has stretched from 553,000 to 1.2 million.
Expanding its rollout has fetched $3.3 billion in capital expenditure.
“The achievements of the past 12 months – including the recent regulatory approval of the Telstra agreement and the draft approval of the Optus deal – give us confidence that we can continue to accelerate the build,” Morrow said.
“These achievements come as a direct result of refinements we have made to the organisation, including improved business processes, the resetting of relations with our delivery partners and increasing employee morale.”