NetComm Wireless eyes revenue surge after NBN deal

NetComm Wireless eyes revenue surge after NBN deal

Aussie vendor to supply Distribution Point Units for NBN rollout

NetComm Wireless director and CEO, David Stewart. (NetComm Wireless)

NetComm Wireless director and CEO, David Stewart. (NetComm Wireless)

Australian telecommunications hardware vendor, NetComm Wireless (ASX:NTC), is set to bolster its bottom line after inking a master equipment and services supply agreement with nbn, the company building Australia’s National Broadband Network (NBN).

The deal sees NetComm Wireless supply nbn with 1-port and 4-port Distribution Point Units (DPUs) that have been designed for the nbn’s Fibre-to-the-Curb (FttC) projects, and related services, with work likely to commence during 2018.

The win for the FttC equipment follows an announcement by nbn in September that it would consider Fibre-to-the-Distribution Point (FttDP) – also known as FttC – connection for over 700,000 premises previously earmarked for Optus Hybrid-Fibre Coaxial (HFC) infrastructure or Fibre-to-the-Node (FttN) technology.

"FttC will now provide up to 700,000 premises with access to the nbn network. This is an increase on the original estimate of approximately 300,000 homes that are not well-suited for FttN or FttP as they are located in outer-suburban or semi-rural areas," said nbn in a statement.
"The increase is primarily those premises where Optus had exclusive pay TV services. nbn made this decision for a number of reasons, but essentially the advancement in FTTC technology made it commercially and operationally more attractive for these areas," it said.

Although no set unit volumes for the NetComm Wireless DPUs have been decided upon, the company told shareholders that the deal will represent a “material contract” to the company and will have a material impact on its revenue in the coming financial years.

The company, which is publicly-listed on the Australian Securities Exchange (ASX), reported a 15 per cent boost in revenue, to $85.3 million, for the year ending June, and a 23.4 per cent surge in underlying pre-tax earnings (EBITDA), to $11.2 million for the year – with prior NBN-related deals helping to push up its financials.

NetComm Wireless has been the recipient of significant contract wins over the past year or so thanks to the rollout of the NBN, which have seen it collaborate with Ericsson to handle the fixed wireless component of the nation-wide rollout.

The company has also launched NBN-ready devices designed to connect Australian premises to ADSL2+, and to VDSL2, or fibre, the moment the service becomes available.

For the company’s CEO, David Stewart, the latest deal with nbn puts the company in a prime position to take its DPU products to markets further afield.

“Our team specifically developed this DPU solution to help build out the NBN in a faster, more cost-effective way,” Stewart said.

“What’s exciting is that our DPU solution has broader global applications that will open up additional partnership prospects offshore, as we have done with NetComm Wireless’s fixed wireless solution.

“We have successfully bolstered our engineering talent and infrastructure to manage growth and pursue quality partnerships, and contract opportunities.

"Winning this significant contract demonstrated we have a strong track record, solid capabilities, and the scale to deliver."

The new deal with nbn comes just days after the federal government revealed it will loan nbn the $19.5 billion needed to ensure the completion of the project.

The government-backed loan comes despite nbn CEO, Bill Morrow, previously stating that the company was searching for private sector backers to make up the shortfall left by the government’s funding cap of $29.5 billion which, according to budget papers, is on track to be tapped by the end of this financial year.

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Tags broadbandNBNnetcomm wirelessFTTdp


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