nbn unlikely to hit ARPU target for 2021

By Dylan Bushell-Embling
Monday, 12 February, 2018

nbn unlikely to hit ARPU target for 2021

The nbn is unlikely to reach its per-user revenue target for 2021 as a result of the recent wholesale price cuts and delays to the hybrid fibre coaxial (HFC) component of the rollout, according to nbn co CEO Bill Morrow.

nbn co has long been targeting an average revenue per user (ARPU) of $52 by 2021. The company’s latest half-year results, published last week, show that as of the end of December average revenue was $44 — up from $43 at the end of 2016.

But although average revenue is increasing, nbn co’s recent promotional offer to price 50 Mbps access virtual circuits at the same price as its 25 Mbps entry-level plans will sacrifice short-term growth for longer-term gains, Morrow said.

He told Fairfax Media that the company is still aiming for the $52 per user revenue target, but at a later time than 2021. Details will be included in the company’s next corporate plan.

Besides the wholesale price cuts, nbn co’s revenue growth could also be impaired by the decision in November to delay any further activations using the HFC component of the network due to the large volume of customer complaints.

While nbn co has previously indicated that the delay could postpone up to $500 million in revenue in a worst-case scenario, Morrow said that because the delay is only impacting connections rather than construction, that figure could be substantially smaller.

nbn co’s half-year results do show that the company more than doubled its revenue for the period to $891 million.

As of the end of the year, more than one in two premises across Australia — around 6.1 million homes and businesses — were able to order an nbn service. But only around 3.4 million services had been activated, although this was an improvement of 940,000 from the first half of the year.

The company remains on track to complete the initial build by 2020. Morrow said that as of the end of December more than 95% of premises were in the design or construction phases of the network rollout or are already able to order an nbn service.

“While that is success we can be proud of, we’ve demonstrated that we won’t pursue those objectives single-mindedly at the expense of customer experience,” Morrow said in a statement.

“We have a strong program of activity in place, and we made some significant decisions last year to prioritise the experience of end users on the network. In partnership with retail providers, we are confident that we will get this right.”

Pictured: nbn co CEO Bill Morrow. Courtesy nbn co.

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