Still no end date for NBN Co HFC sales halt

But average revenue per user is finally on the way up
Bill Morrow - CEO, nbn

Bill Morrow - CEO, nbn

NBN Co chief, Bill Morrow, has revealed that the National Broadband Network (NBN) builder still has no firm date from which it will begin taking new orders for its hybrid fibre-coaxial (HFC) access network.

The company revealed in late November last year that it would temporarily pause all new orders over its HFC access network as it works to improve service standards across the network.

"We are going to delay the rollout of the HFC network until we can go back and calibrate a number of processes so we can adjust a number of issues on the network to give the level of quality that we know that HFC network is capable to give," Morrow said at the time.

"This will result in a six to nine-month average delay for those people that have yet to connect to the NBN network over HFC,” he said.

Now, more than two months later, the company is yet to put a date on when it will begin taking new orders for access services via the HFC technology.

“We’re now conducting upgrade work to improve the service quality on HFC. And it’s still too early to be specific on timelines for releasing this footprint, but we are progressing quickly,” Morrow said during an NBN Co half-yearly financial report call on 12 February.

Morrow stressed that the pause is on new sales only, and that the build of the HFC network continues “at pace”.

“HFC remains an important part of our technology mix, and we’re confident it will deliver the experience we all expect. This was a tough call for us to make, but we will not prioritise the speed of the build ahead of customer experience,” he said.

At the same time, the latest financial results, for the six months ending December 2017, show that the company has finally been able to nudge its all-important average revenue per user figure (ARPU) in an upward direction.

ARPU grew by two per cent year-on-year, to $44, up from $43, where it had stagnated for more than a year.

Since the NBN rollout began, ARPU – the average revenue generated per end customer, per month – has played an essential role in the modelling of the estimated future profit of the company.

Indeed, NBN’s 2017 Corporate Plan referred to an increase in ARPU as one of just a handful of “critical sensitivities” that could affect the company’s long-term financial outlook and impact its peak funding range.

The need for higher ARPU has seen the company push for greater enterprise coverage. In November last year, NBN Co announced the launch of several product and service updates designed to help retail service providers (RSPs) meet market demand for medium, enterprise and government businesses migrating to the NBN.

Just days ago, it was announced that Telstra, Vocus and TPG Telecom were set to collaborate with NBN Co’s business division on enterprise-grade broadband services based on the National Broadband Network (NBN) builder’s Enterprise Ethernet offering.

With ARPU on the way up and an expectation by NBN Co to see 1.1 million additional end-users to be on its 50Mbps plan by June, it appears the company’s strategies appear to be finally getting some traction in the market.

NBN Co, meanwhile, reported 6.1 million premises ready to connect and 7.1 million premises ready for service, as of the end of December 2017.

It also reported 3.4 million premises with an active service over the NBN access network, more than doubling year-on-year.

At the same time, NBN Co reported $891 million in revenue for the half-year, more than doubling year-on-year.