The outfit building Australia's National Broadband Network has outlined how it plans to achieve the per-user revenue mix that underpins its eventual profitability.
Announcing nbn™'s preliminary Q1 fiscal 2019 quarter results [PDF] yesterday, CEO Stephen Rue promised residential users won't be stung with price rises. Rather, he said, the ISP expects monthly "average revenue per user" (ARPU) growth to come from households moving to higher-speed services, and take-up of business services, in roughly equal measure. This should help it foot the bills, it's hoped.
Rue told analysts in a conference call briefing that about half the expected ARPU growth would come from biz users, targeted by products like its recently launched business Ethernet offering.
Here's the highlights from the company's three months to September 30:
- Revenues up 53 per cent on the year-ago quarter to AU$620 million.
- A 21 per cent fall in the company's loss, to $1.086 billion, mostly attributable to subscriber costs falling by nearly half, from $681m to $344m.
Rue also used the call to reiterate nbn™'s opposition to changing its wholesale tariffs. Telstra has been leading calls for wholesale prices to be cut, particularly in the Connectivity Virtual Circuit (CVC) product, the per-megabit-per-second, per-month fee for carrying traffic between customers and retailer networks.
nbn™ adjusted its wholesale prices last year, Rue said, and that's that: the company “won't be diverting” from the revenue projections in its current corporate plan.
Any aggressive restructuring of wholesale prices would require a write-down of nbn™'s book value, something chairman Ziggy Switkowski ruled out in October.
At the end of that month, retailer Amaysim offloaded its loss-making NBN service to Southern Phone Company for $3m, citing “unsustainable wholesale costs” among its reasons for quitting the market to focus on mobile and energy resale. ®