NBN lowers peak funding prediction to $54bn


news In its Corporate Plan 2017, released yesterday, NBN Co confirmed that it is still expecting to complete the broadband network on time, and predicted the peak cost of building the network would be $2bn lower than it expected last August.

The firm said in the report that, currently, almost two thirds of all Australian premises are either in design, construction or able to order an NBN service, and that the company remains on track to complete the network build by 2020 – both predictions made in the Corporate Plan 2016.

NBN Co’s expectation that it will meet a target of connecting 8 million premises by the same year is also unchanged.

However, there are some notable differences in the financial predictions going forward, including:

  • Increased annual revenue for FY2020 to an estimated $5bn (up from $4bn last year), with ARPU (average revenue per user) forecast to $52 (up from $43 last year)
  • Remains on track to complete network build with peak funding of $49bn (down from 52bn last year)
  • Decreased top end of peak funding range by $2bn to $46-54bn
  • Increased IRR [internal rate of return] to 3.2–3.7% (up from 2.7–3.5% last year).

In the report NBN Co explained the funding changes as being down to more information being available, reducing uncertainty:

“Progress in FY16 has provided more data with which to forecast, but considering the scale and complexity of the network build, much uncertainty remains. The plan continues to support a peak funding base case forecast of $49 billion, and a range of $46 billion to $54 billion. This is a narrower range than last year, reflecting a reduction in uncertainty as the NBN network is rolled out.”

NBN Co CEO Bill Morrow added in a statement that strengthening the NBN’s relationships with its partners, finalising contracts to the end of the build, and improved data quality have enabled the company to “minimise many of the uncertainties and cost assumptions in the business”.

“This has led to a projected decrease in the top end of the peak funding range, now $46-54 billion, down from $46-56 billion in the 2016 Corporate Plan,” he said

On the increased average revenue per user (ARPU) predicted this year (a $9 increase), the report said:

“This increase is driven by increased usage, growth in speed tier mix, and a strong contribution from business revenue, consistent with the retail market opportunity.”

Morrow explained that data consumption is key, with expected growth of 30% each year (CAGR). “This will result in increased ARPU, which, paired with a positive speed tier mix, will produce strong revenue growth,” he said.

The NBN said that while the network remains a “critical and highly complex project”, the risks are “known and are being managed”.

Despite widespread criticism of its ‘multi-technology mix’, even from ex-staff members, the company further suggested this “technology-agnostic approach” enables it to select the “ideal technology” for each neighbourhood as one of the final steps in the design process, as well as to introduce new technologies as they become commercially viable.

Morrow commented that this “flexible” approach ensures NBN Co can deliver broadband access “to everyone as soon as possible and at least possible cost”.

“The road ahead is steep,” he said. “We are realistic about the challenges and we are well aware of the risks. We have never been better prepared to manage the successful delivery of the NBN network.”

Image credit: NBN company


      • “@m that project hasn’t compeleted yet; no way of telling;-)”

        Maybe you (and Reality) shouldn’t be relying on NBNCo’s published data (like CPP) to attempt to flog previous shareholders and management then mmmm?

        Point proven, thank you.

        • @m “Point proven, thank you.”

          Sure is; your claim projects can’t be evaluated before completion is the complete rubbish I called it out to be (CP17 revision but one example; performed everywhere).

          HFC CPP blowout under the new management, used to flog them. Not even the basics; exposing this delim didn’t take long. Next…

          • “your claim projects can’t be evaluated before completion”

            That is not what I claimed Richard. Nice attempt at rewriting history (a tactic of both yours and politicians). Say it often enough and you’ll hope it becomes fact?

            I claimed that you cannot call a project a success or failure until after it’s complete. There was a bit more discussion on that as well … but you do like to boil it down to attempted slogans. Something else you and the politicians have in common. Dishonest though.

            That didn’t take long either. Carry on.

          • @m “That is not what I claimed Richard.”
            Actually it was, repeatedly. Comical then as now.

            Nice attempt at rewriting history (a tactic of both yours, politicians, public servants, lazy know nothings,etc ). Say it often enough and you’ll hope it becomes fact?

    • 2013 election? since then we have had SR 13 from which the 2013 election forecasts were changed and well publicised here and in the main stream media.

      Since SR 13 we have had CP 16 and recently CP 17, and another election last month based on the MtM predictions in CP 16.

      Please catch up.

        • Indeed.

          Maybe they shouldn’t have made promises they knew they couldn’t keep (that’s if they actually knew they were lying). Or perhaps this shows they really had no idea at all.

          • You should have booted them out at last months election, you will have to wait until 2019, but it will all be too late by then.

            That’s really bad luck, that’s despite all of Rizz’s sock puppet crap for three years, go figure huh?


          • Wow I’ve been away for a fortnight (won’t do a Dick and say look at me) suffiec to say, I’ve been avoiding tech gadgets and as a consequence the dual idiots here…

            And yet my expose’s of the dual idiot’s ridiculous comments/contradictions are so etched into their little boy psyche’s they still insist on mentioning me…


        • Q. is alain (reality… lol) getting sillier?
          A. Seems so.

          Q. Did anyone think that possible?
          A. No.

          Gotta love the latest (ill)logic…

          In relation to transparency, pre-election promises (2013), cheaper/faster MTM 25 Mbps at $29.5B for all by 2016… the answer?

          A. “You should have booted them out at last months election, you will have to wait until 2019, but it will all be too late by then.”

          Apparently, it doesn’t matter what was promised, because they weren’t voted out. It’s the lap dogs/little Dick’s take on the never ever GST promise, but in reverse?

          It’s not a broken promise if you are voted in or on the flip side, not voted out… ROFL

          However, I do agree in relation to one part, it will be too late by then… As such, Australia is now a backwater wallowing in obsolescent FRAUDBAND thanks to this latest bunch of incompetents in Canberra.

          But what’s worse, mindless goons like a few here, not only are too stupid to see it, but are so unparalleled in their subservience they both aid and praise the dumbing down of our tech network/infrastructure.


      • Thank you for mentioning the SR.
        In it Turnbull had 6 options. He chose the absolute worst option that he could.

  1. Costs continue to increase (CPP HFC by 30%), only upward revisions of forecasted ARPU kicking the final acknowledge of the losses down the road a little . Renai et al fought the connection between cost & revenue & IRR; thankfully most have joined the numeracy program (a few years behind, déjà vu).

    We seen customer chosen AVC speeds consistently underperform the company’s forecast. CP17 speed profile forecasts shows 80% for 25mbps or less expected for the outlook period. Therefore CVC revenue the opportunity area for significant revenue growth (déjà vu).


    With the company’s capex blowouts likely all accounted for the scale of the taxpayers’ losses are now tied to ARPU growth; tied to CVC growth. Tens of billions of taxpayers “investment” riding on the actuals v forecast outcome. With IRR @ ~3% not much room for error. Charade has max 2 years to run.

  2. “NBN lowers peak funding prediction to $54bn”

    By burning through the contingency reserves…

    FY17 – $500m
    FY18 – $600m
    FY19 – $700m
    FY20 – $700m

    There’s more than $2b there…

    • It is indeed fortunate that the more cost efficient MtM model that uses existing infrastructure was chosen then.

      At $4,400 CPP re stated in CP 17 for brownfields FTTP the contingency reserve would have been used up at a even higher rate.

      Remember the Labor 2016 funding requirement for the NBN was $57B, and that was just for a extra 2M on FTTP, sometime between now and 2022 (maybe).

      • Well then devoid why is the peak funding costing almost as much as a full fttp roll out.

        Do you buy a rusted out combo that is $3k less than a new Holden and claim it cost efficient

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