Whatever you think about Australia’s NBN project, it is bringing in some serious dollars. In the 2017 Financial Year update, nbn have announced that they’ve achieved an important milestone of A$1 Billion in revenue, a figure that by 2020, they believe will reach A$5 billion.
The project costs are massive for an infrastructure project this size and the many, many expenses, certainly means we’re a long way from profitability. Still it is another important milestone.
Before we hit the pub and imagine everything is fine, remember the Coalition’s original pledge of faster and cheaper mixed-mode technology, set the cost of $29.5 billion for the project, in reality the costs will be far higher (somewhere in the ballpark of $48.6 billion) when all said and done. Given internet is an essential service in 2017 and something that we’ll continue to pay for each month, the project will continue to make money long into the future. After the investment is paid back and the electricity bill from all the nodes are paid for, the project will eventually tip into the black. The Government’s plan remains unchanged, suggesting it’ll sell the asset, something I violently disagree with. There’s very few assets the Government has left that makes money, so they’d be well served to hold on to this one as long as they can.
Right now there’s 5.7 million premises that can or have ordered an NBN service, beating (revised) expectations of 5.4 million at this time. nbn and their subcontractors are now adding more than 100,000 new properties per week. For the project to have any chance at meeting the targets of being available at 11.9M premises and activated at 8M homes and businesses, they needs a strong ramp up in connections and that’s finally happening.
There are more than 30,000 people, both from nbn and our partners, passionately delivering the benefits of fast broadband into the homes of Australians by 2020.
That massive workforce has almost doubled the entire number of connected properties in the last 12 months. So whatever you think, however many issues there are in this project, you can’t deny things are moving at pace now.
Fibre-to-the-Node (FTTN) now accounts for around half of the entire footprint for the 2017 Financial Year. Together, the scale helped reach the halfway mark, and now more than 50% of Australian premises are able to order an service through their retailer.
It does still concern me that less than half are actually switching to the NBN, if closer to 100% connected, the revenue number could be also close to double. There’s a variety of reasons why someone may not switch when NBN becomes available at their premises, but the time will come when users are forced to transition, the problem is there’s months of potential revenue that’s being missed, during the 18 month transition window.
Karina Keisler is in charge of Corp Affairs at nbn and if you care about the project at all, you’ll do well to follower her on Twitter.
More information at nbnco.com.au