NBN Co has seen its half year revenue rise by 39 per cent to $1.81 billion due to strong momentum in total activations, plus continued residential and business growth.
Statutory earnings before tax and before subscriber costs increased from $213 million to $775 million for the financial year's first six months ending 31 December 2019.
Capital expenditure was down from $2.9 billion to $2.5 billion as the company approaches the final stage of the build. Earnings before tax (EBIT) dipped by a quarter to $2.14 billion.
NBN Co CEO Stephen Rue said its earnings position was continuing to strengthen.
“It’s important for NBN Co to generate reasonable earnings to allow reinvestment in the network, while also meeting our borrowing obligations and to generate a modest return on the Australian taxpayers investment,” Rue said.
During the first half of FY20, more than 667,000 premises were NBN ready, bringing the number up to more than 10.5 million connections.
There were also more than 907,000 residential and business premises activated in the first half of FY20, lifting total activations to 6.44 million by 31 December 2019.
Strong demand from new and existing customers upgrading to higher wholesale speed tiers generated Residential Average Revenue Per User (ARPU) of $45, up from $43 in the previous corresponding period.
As of December 31, 67 per cent of residential and business customers were on wholesale speed tiers of 50 Mbps and above, up from 56 per cent in the first half of FY19.
Business revenue also increased to $319 million in the first half of FY20, up from $214 million in the previous corresponding period.
“The progress of the roll-out during the half was particularly pleasing, given we are now at the most challenging stage of the build, which takes in more complex sites,” Rue said.
“In the six months to 31 December 2019, we undertook one of the biggest ever phases of deployment and activations of residential and business premises on the network, with more than 907,000 premises activated and more than 667,000 premises declared ready to connect.
“We expect the urban roll-out activity to further accelerate in the second half, particularly across our Fibre to the Curb (FTTC) deployment."
Last month NBN Co caved to industry pressure over its sales activities with enterprise customers announcing it will stop contracting directly with end users.
Retail service providers (RSPs) engaged in a public battle with the broadband builder over behaviour they see as encroaching on their territory.
NBN Co said it will continue to engage with customers to “educate and stimulate demand for NBN wholesale services”, but RSPs will have the entire direct contractual relationship.
The provider has faced heavy industry push back over recent months. Vocus, Telstra and TPG, in particular have been vocal on the issue, with the former attacking NBN Co’s channel sales program this week.