NBN Co revenue rises 10 per cent to $5.1B

NBN Co revenue rises 10 per cent to $5.1B

Driven by additional activations and increased demand for higher speed tiers.

Stephen Rue (NBN Co).

Stephen Rue (NBN Co).

Credit: NBN Co

National broadband network builder NBN Co has seen total revenue rise 10 per cent to $5.1 billion in FY22 ending 30 June.

Earnings before interest, tax, depreciation and amortisation (EBITDA), after subscriber costs, was $3.1 billion, 130 per cent higher than the $1.35 billion EBITDA achieved in FY21.

Statutory net profit after tax (NPAT) improved by 62 per cent or almost $2.4 billion in FY22, reducing the statutory loss from $3.8 billion in FY21 to less than $1.5 billion.

NBN Co pointed out the revenue result was due to approximately 316,000 additional net activations since 30 June 2021 and counted 8.5 million residential and business premises connected to the network. 

In particular, it recognised increasing demand for higher speed tiers with 76 per cent of customers on retail plans based on wholesale download speed tiers of 50 Mbps and above and 18 per cent of residential customers using plans based on wholesale speed tiers offering download speeds of up to 100 Mbps and above.

Residential average revenue per user (ARPU) remained stable and unchanged since the half-year at $46, up from $45 at 30 June 2021. 

For the first time, revenue from the business segment amounted to $1 billion, up 20 per cent year on year.

During the financial year, NBN Co raised a further $7 billion in bank and capital markets debt, including the issuance of an $800 million green bond, and repaid a further $6.8 billion of the $19.5 billion Commonwealth loan, lowering interest payments and reducing the outstanding balance to $6.4 billion.

Capital expenditure was $2.5 billion as it continued to invest in upgrades to the network, expanding into new residential and business premises and delivering capacity upgrades to meet growing demand for data.

“Our oversight and financial management of the business enables us to continue to invest in the network to deliver faster speeds and greater capacity across the network for the benefit of all customers,” NBN Co CEO Stephen Rue said. 

“We have accelerated our private debt raising and capital recycling program over the last three years to take advantage of record low interest rates, locking in a series of well-priced medium-term notes. This provides us with a good hedge should interest rates continue to rise in the future.

“It is, however, important that we continue to prudently manage our capital and operating costs and generate consistent, predictable revenue so we can continue to deliver on customer, industry and government expectations as we work to lift the digital capability of Australia.

NBN Co’s subscriber payments to Telstra and Optus continued to decline, decreasing from $1.2 billion in FY21 to $175 million in FY22. The reduced payments are the result of the company reaching the tail end of disconnections from legacy services.

NBN Co has commenced design activity to extend the Fibre Connect upgrade program to an additional 1.5 million premises and also recently completed hybrid fibre coaxial (HFC) network upgrades.

It was is also making progress on its fibre-to-the-node (FTTN) and fibre-to-the-curb (FTTC) to fibre-to-the-premises (FTTP) upgrade program. 

As of 30 June about 230,000 FTTN premises and around 380,000 FTTC premises were able to upgrade to FTTP and access National Broadband Network (NBN) Home Ultrafast services.

NBN Co has also confirmed that it is progressing well with the $750 million investment to significantly enhance the capability of the NBN fixed wireless network. 

The investment will expand the coverage, speed and capacity of more than 2,200 fixed wireless infrastructure sites and more than 22,000 cells in rural, regional and remote areas of Australia.

NBN Co withdrew its previously proposed SAU Variation on 27 July, recognising that a varied SAU should reflect the changes in the policy landscape and operating environment since the current variation was lodged.

The company has engaged in further consultation with the government and the Australian Competition and Consumer Commission (ACCC) and is planning to release a new SAU Variation Discussion Paper later this week.

NBN Co will participate in further consultation, chaired by the ACCC, later this month which will seek feedback and input from Retail Service Providers and consumer advocacy groups involved in the process. Following this consultation, NBN Co plans to submit a revised SAU Variation proposal in October 2022.

“We are also committed to collaborating with the industry to deliver great outcomes for customers and play our part to create a new commercial and regulatory framework,” Rue said. 

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