NBN per-user revenue remains stagnant as new services surge

NBN per-user revenue remains stagnant as new services surge

Average revenue per user stands at $43 per month

The National Broadband Network’s (NBN) average revenue per user has remained stagnant in the three months ending March, despite a surge of new services and activations.

The company behind the NBN, nbn, revealed in its latest quarterly results that the number of premises ready to order a service reached 4.6 million, 130 per cent up from where it stood at the same time the previous year, at two million.

The company also reiterated the Australian Competition and Consumer Commission’s (ACCC) latest figures revealing that the NBN wholesale access services being supplied in Australia by nbn has cracked the two million mark, representing a 13 per cent increase compared to the third quarter in 2016.

Meanwhile, total revenue was up by 142 per cent, compared to the third quarter 2016, to $665 million by the end of the reporting period.

However, the company’s average per-user-revenue (ARPU) has remained unchanged from previous periods, holding at $43 per month.

The drivers of ARPU consist of both active end-user activity – determined by consumption volume – and price, which is pegged to speed rate.

In its half-yearly report, nbn flagged its ARPU rate as a risk factor to its future revenue forecasts.

A continuously flat ARPU could indicate that fewer than anticipated end customers are opting for nbn’s higher speed, higher revenue-generating product options.

Indeed, in early May, the ACCC said that 55 per cent of all services acquired on the NBN are at the base, 25/5 Mbps speed tier option.

“The most popular speed tier on the NBN remains 25/5 Mbps,” ACCC chairman, Rod Sims, said that the time.

The ARPU has remained flat despite the reduction of the connectivity virtual circuit (CVC) rates paid by retail service providers (RSPs) introduced in June 2016 and December 2016.

Earlier this year, nbn chief, Bill Morrow, flagged that nbn would need to a greater uptake of its higher-speed products to reach the $5 billion annual revenue target it has set itself for 2020.

Yet, during nbn’s half-yearly financial results presentation in Sydney on 9 February, Morrow indicated that the company was seeing more growth in its 25Mbps tier and lower-speed product segments than its higher-speed offerings.

Regardless, nbn is talking up its latest quarterly figures, revealing that, at the end of the quarter, 1.9 million homes and businesses in Australia could connect to the NBN using Fibre-to-the-Node (FTTN) technology.

FTTN now makes up more than 40 per cent of all serviceable premises on the NBN as of end of March, after an additional 1.5 million premises added to the FTTN footprint in the past year.

Morrow also revealed that total equity funding at the end of the quarter was $25.5 billion, and that the company anticipates expending the $29.5 billion of committed government equity by September 2017.

Meanwhile, he said that debt funding arrangements are in place to enable completion of the build by 2020.

The latest nbn results come as the Telecommunications Industry Ombudsman (TIO) releases its latest six-monthly telco consumer complaints update, revealing a 117.5 per cent year-on-year increase in complaints about services delivered over the NBN for the period.

However, the TIO stressed that the rate of increase in these complaints is slower than the rate of increase in the number of new premises connected to the NBN.

Overall, the TIO experienced an increase in complaints for phone and internet services by 5.3 per cent from the preceding six months, representing a 33.8 per cent increase in complaints compared to the same six-month period in 2015.

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Tags broadbandNBNnational broadband networkacccBill MorrowRod Sims

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