NBN Co has announced that it is on track for completion of the NBN by 2020, aiming to have 11.7 million houses ready to connect, 8.1 million activations, $3.9 billion in revenue in FY20 and $51 billion in peak funding.
These targets are outlined in the NBN Co’s recently released Corporate Plan 2019-2022.
The network rollout has reached momentum and scale with all technologies launched in the Multi-Technology Mix, more than 60 per cent of Australian homes and businesses now ready to connect to a service over the NBN access network, and 99 per cent of the network footprint now either in design, construction or complete.
Construction and activation progress remains on track
The company’s deployment forecasts show that FY19 will be the biggest year for construction with an additional 2.7 million premises to be declared ‘ready to connect’. By the end of FY19, more than 80 per cent of Australian homes and businesses are forecast to be ready to connect to a service over the NBN access network. A further 1.9 million are projected be added to the footprint in the NBN network’s final year of construction.
FY20 is forecast to be NBN Co’s most significant year of activations with two million new homes and businesses expected, bringing total activations to 7.5 million. By FY22, 8.7 million premises are expected to be connected to services over the NBN access network.
Investment in customer experience
NBN Co has reported improvements in meeting agreed installation times and agreed fault restoration times with Retail Service Providers (RSPs), and is helping to improve end user experience on the NBN broadband access network.
The implementation of new wholesale pricing discounts in December 2017 reportedly helped to increase the number of end users on higher speed plans to 45 per cent in June 2018 from 16 per cent a year earlier. New wholesale pricing options have also helped reduce average network congestion from more than five hours per week per premises in June 2017 to less than 30 minutes.
To help improve network capacity across regional and rural Australia, the Corporate Plan 2019-22 also provides for more than $1 billion in investment on the fixed wireless network.
Revised revenue and peak funding forecasts
The Corporate Plan 2019-22 forecasts total revenue at $3.9 billion in FY20 in line with the re-phasing of activations from the HFC pause decision and deferred revenue from the implementation of new wholesale bundle discounts. The company continues to forecast annual revenues of at least $5 billion from FY21 onwards.
Total revenue will be supported by a forecasted growth in average revenue per user (ARPU) from $44 to $51 in FY22, stimulated by expected increase in take-up of higher speed plans, increased data consumption and penetration into small and medium business segments.
These forecasts result in the company’s internal rate of return remaining within range at 3.2 per cent.
Peak funding is estimated within the range outlined in the previous Corporate Plan at $51 billion, inclusive of $1 billion contingency to accommodate for any risks in the complex final stages of the build. The increase from the estimated $49 billion base case is the result of the HFC pause and deferred revenues, the introduction of wholesale pricing bundle discounts and additional investment in the fixed wireless network.
CEO commentary on Corporate Plan 2019-22
NBN Co CEO Stephen Rue said, “NBN Co is undergoing a significant period as we work to complete the build, improve customer experience and position our business for the future. The Corporate Plan 2019-22 is our blueprint for how we will navigate the complexity and deliver on our goals to provide affordable access to all Australians by 2020.
“We know the network is already having a significant impact on the lives of Australians and the economy, helping to drive the growth of new businesses, industry productivity, jobs, educational opportunities and access to healthcare options.
“There will inevitably be challenges in the remainder of the build – some known, some new. But our ability to deploy the network at speed and scale is evident, and we’re well-positioned to continue enhancing customer experience and delivering access to the benefits of high-speed broadband to all Australians.”
Lauren ‘LJ’ Butler is the Assistant Editor of Utility magazine and has been part of the team at Monkey Media since 2018.
After completing a Bachelor of Media, Communications and Professional Writing at the University of Wollongong in 2014, and prior to writing about the utility sector, LJ worked as a Journalist and Sub Editor across the horticulture, hardware, power equipment, construction and accommodation industries with publishers such as Glenvale Publications, Multimedia Publishing and Bean Media Group.