nbn third quarter results: fast closing the gap to full year targets

nbn today released strong performance results across all key metrics for the third quarter ended 31 March 2017, signalling momentum towards full year targets and the half-way milestone.

Progress for the nine months ended 31 March 2017:

• Premises able to order a service reached 4.6 million (up from two million - a 130 per cent increase - compared to third quarter FY16);
• Premises with an active service over the nbn™ network surpassed two million (up from 903,000 - a 123 per cent increase - compared to third quarter FY16);
• Total revenue $665 million (up from $275 million - an increase of 142 per cent - compared to third quarter FY16);
• Average Revenue Per User (ARPU) remains $43 per month.

Multi-Technology Mix the catalyst for rollout progress

Comparing year-on-year results, nbn has doubled the footprint of the network, simultaneously doubling the number of paying end users accessing the network through Australian retail providers.

At 31 March 2017, 4.6 million premises were able to order a service compared to two million premises able to order a service over the nbn™ network for the same quarter last year.

The rollout has gained momentum with more than 58,000 premises being made ready for service weekly.  At the same time last year 26,000 premises were added each week.

“There is no denying that we are making this rapid progress primarily due to our use of existing infrastructure and technology-agnostic approach,” said Bill Morrow, nbn CEO. 

“In particular, the maturity of the Fibre-to-the-Node (FTTN) deployment processes means we have seen extraordinary annual growth in our footprint.  At the end of the quarter, 1.9 million homes and businesses in Australia could connect to fast broadband using FTTN*,” said Mr Morrow.

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

“To double rollout and activation figures this far into the build is remarkable. We are fast approaching the half way mark, and yet in the past 12 months, we doubled the number of premises able to order a service thanks to the hard work of nbn and our committed Delivery Partners in the field.”

The pace of the rollout has led to a similar uplift in activations sold through Retail Service Providers. 

Comparing year-on-year results, nbn has doubled the number of activated premises on the nbn™ network, to reach more than two million users by the end of the reporting period.  

In short, nbn has activated more than one million new end users over the past 12 months.

“Total equity funding at the end of the quarter was $25.5 billion and we anticipate expending the $29.5 billion of committed government equity by September 2017. Debt funding arrangements are in place to enable completion of the build by 2020,” said Mr Morrow.

Focusing on end user experience

Doubling the network user base during the twelve months has required an increased intense focus on customer experience and sentiment as voiced by both end users and nbn’s retailers.

“Our priority is to work with our retailers and partners to build a positive service experience for every household and business when they connect to the nbn™ network.”

“We want everyone to have a good experience on our network which is why we are determined to improve our processes and information so that end users can have a constructive discussion with their chosen retailer.

“End users should utilise the address checker on our website to find out when they can order a service, know how to choose the right speed tier for their home’s needs, shop around for the best deal, and to know what elements can impact their internet experience,” he said.

“It is in all of our best interests to get the most out of this public investment.  We are building a network for today’s needs with a clear upgrade path for the future enabling us to adjust as and when the demand requires us to do so,” said Mr Morrow.

In line with activations growth, revenue for the nine months ended 31 March 2017 was $665 million, which is already 58 per cent more than the full year revenue for fiscal 2016.

Adapting for innovation and growth

Delivering a flexible and upgradable, innovative network for tomorrow’s needs means nbn has announced a number of recent successful trials for anticipated future upgrade paths.

During the quarter the company committed to bridging the digital divide for regional Australia with a new wholesale speed plan of 100/40Mbps on Fixed Wireless next year.

“The Fixed Wireless 100/40Mbps wholesale speed plan aligns to our core purpose of connecting Australia and bridging the digital divide, bringing city speeds to regional areas. Just last week, we revealed trial results on Fixed Wireless in Ballarat, Victoria, that received 1.1Gbps**,” said Mr Morrow.

“Technologies trialled are delivering ultrafast speeds at a lower cost or time to deploy than other access technologies,” he said. 

 “We also announced an expansion of our network footprint earmarked for Fibre-to-the-Curb technology from 700,000 premises to one million premises. 

These key milestones achieved in the quarter, along with our trials, continuous innovation and flexibility, bring us a step closer to connecting eight million homes via retailers by 2020.”

* FTTN includes the networks within the suite, FTTN and FTTB.

** These speeds were achieved by end users in the context of a trial and are not necessarily reflective of the speeds that will be experienced by end users.  End user experience including the speeds actually achieved over the nbn™ network depends on the technology over which services are delivered to their premises and some factors outside our control like equipment quality, software, broadband plans, signal reception and how the end user’s service provider designs its network.