More Australians seeking faster NBN plans

NBN Co is lifting revenue as the broadband network approaches completion, with more people paying for higher-speed plans.

NBN Co chief executive Stephen Rue. Picture: Aaron Francis

NBN Co chief executive Stephen Rue is predicting an Australian economy-wide shift to greater remote work and learning, and says his network has the capabilities to support it.

The NBN is just weeks away from completion, and government-owned company building the project lifted average revenue per user in its annual results on Thursday, with Australians buying up higher speed plans amid the pandemic.

NBN Co posted total revenue of $2.8bn for the nine months to 31 March 2020, up 38 per cent on the same time a year earlier. The company also reported narrowing losses, in what is tipped to be one of its last quarterly results before an expected privatisation.

Operating expenses were down from $1.65bn to $1.556bn, while it posted a loss before interest, tax, depreciation and amortisation (LBITDA) of $732m, compared with a $808m loss a year earlier.

One of the network's crucial metrics, monthly average revenue per user, was up to $45 from $44 a year earlier, which chief executive Stephen Rue said was a result of Australians purchasing plans at higher speeds. The company is targeting a residential ARPU of $49 by 2023.

NBN Co now has more than two-thirds of the network on speeds above 50Mbps, with just 32 per cent left on 25Mbps and 12Mbps connections.

Mr Rue told The Australian that the NBN had “passed the test” in grappling with a surge in demand caused by COVID-19 lockdown restrictions.

“In early March it became obvious that Australia was going to follow trends of what was happening in Europe with people working and being educated from home, and we concluded that the busy hour could grow up to 40 per cent,” he said. “We saw a 26 or 27 per cent growth at busy hour.

“I believe [post-COVID] we will see more people working from home, and more usage of applications for health and education for example. That was always going to happen, but the COVID challenge the world has faced will bring forward some of those initiatives and the usage of these services. And a public that is more comfortable now with online delivery of services.”

The company on Thursday said it had reached 7 million connected premises, two months ahead of its target. More than 11.2 million premises are “ready to connect”, with NBN Co now eyeing a future which will likely include the company being cashflow positive, and privatisation in some form.

“Our focus has been on completing the network and next year it will be continuing to provide customer service, manage things like outages and capacity management. The longer term is obviously to grow the value of this asset, and where we see value of creating investments we will look to make those like any other company,” Mr Rue said.

The network is just weeks away from completion, but the executive said some more difficult premises would still need months until they can achieve activation.

“A network is a living, breathing organism and continues to evolve and continues to grow,” Mr Rue said.

“[The network completion] will be a time to reflect upon the extraordinary amount of work our teams have done since the inception of the company to build from scratch a network that has reached every home and business in Australia.”

He added that NBN Co's business segment was particularly strong. Business revenue climbed to $496m in the nine months to 31 March 2020, up from $341m a year earlier.

Communications minister Paul Fletcher praised the results.

“NBN Co has been connecting up to 40,000 premises per week, with more than 68 per cent of existing customers and 80 per cent of new customers choosing retail plans with peak speeds of 50 Mbps or higher. The increasing take-up of higher speed NBN plans shows the value that Australian households and businesses perceive in being able to access affordable, fast and reliable broadband,” Mr Fletcher said.

“With more than 11.38 million homes and businesses now able to access an NBN service, NBN Co is within striking distance of its Corporate Plan target of completing the large scale network rollout with 11.5 million premises able to connect. There are more than 7 million active connections and in the three months to March 31, more than 445,000 new customers have been activated onto the network.”