NBN cuts entry-level broadband prices, nixes differential pricing for video


NBN Co has detailed a price cut for entry-level broadband services that could make it more economical for retail service providers (RSPs) to offer ADSL-equivalent plans.

The company said it planned to shave at least $16.80 off the additional monthly charge levied on entry-level services once an extremely low usage threshold is passed.

NBN Co in June launched an industry consultation on its wholesale broadband pricing, with the company indicating it wanted to encourage the take-up of higher speed services as well as make NBN services more attractive to low-income households.

The company today revealed it had launched a second round of consultation, with NBN Co indicating it would move to quickly cut the wholesale pricing of low-end broadband services.

The company has a complex pricing structure for its entry-level 12Mbps services. A basic service with 150Kbps of included capacity has an effective wholesale price of $22.50. That can be used to serve households that are only interested in voice services or that have very low data needs.




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Vodafone: Australians should strive for higher-speed broadband


How telecommunications providers can give Australians the fastest broadband speed possible is the key issue said Matthew Lobb, Vodafone general manager for fixed broadband.

Speaking at ACCANect 2019, Lobb believes Australians should not settle for the minimum but telcos should be striving to get more customers on higher speed plans at a better price.

“And really, the important issue is that people’s needs change, and Australians needs change. And we were quite impressed with 45 kilo-bits modems, in the early 2000s, but these days that would be seen as completely inadequate by all Australians,” Lobb said.

“Similarly 10 megabits a second, which is ADSL2+, something from there was the norm 10 years ago, is not a worthwhile service for any Australians.”

Lobb said that the issue is not the roll out of the National Broadband Network (NBN) but the pricing and the way it is sold are the key issues. 




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NBN not worth the money it cost to build it, Vocus chief executive says


Consumers are paying the price for government rules designed to protect NBN Co’s monopoly and help ensure it recovers the cost of building its network, Vocus Group chief executive Kevin Russell has argued.

“The real market value of the NBN is far, far less than what it cost to build,” the CEO said today. NBN Co’s decision-making “is driven as a monopoly targeting financial returns, rather than consumer needs and market reality.”

In remarks prepared for the ACCANect conference of the Australian Communications Consumer Action Network, the Vocus CEO said that because NBN Co’s financial targets are based on recovering the network’s build cost, “prices are far higher than would be achievable in a market-led environment.”

The Vocus chief executive took aim at NBN Co both over its prices and its approach to wholesale pricing.

In the ADSL era, the prices charged by Dodo, which is owned by Vocus, consistently trended downwards, he said. “This is in stark contrast to Dodo’s NBN plans, where all we have done is continually put prices up, to cover NBN’s increasing wholesale costs,” the CEO said.




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Optus CEO details ‘NBN champion’ program to combat migration woes


Optus says it is working to improve the experience of migrating to the NBN, with the telco’s CEO, Allen Lew, today revealing details of an initiative to smooth the transition to the new network.

In notes prepared for an address to ACCANect, the conference of the Australian Communications Consumer Action Network (ACCAN), Lew revealed that the telco has invested “tens of millions of dollars” in the “Optus NBN champion” program.

The program is designed to address a range of frustrations encountered by customers during the migration to the NBN. Those include confusion caused by the hand-off between sub-contractors, NBN Co and retail service providers (RSPs), struggles with installation and chasing answers to questions, lengthy activation processes, and a lack of visibility of the process for customers.

“We are proactively reaching out to existing customers who are migrating to the NBN to reassure them that one person will manage their order from receipt right through to completion and for the first 30 days of activation,” Lew said.

“This isn’t a promise to do; we have been embedding this since May and slowly building scale so that we can offer it to all our customers.”




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NBN Co to use Infinera’s SDN tech across network


NBN Co has installed Infinera’s Transcend software defined networking (SDN) solution across its 60,000km fibre optic transit network.

The SDN technology features service rerouting capabilities for dense wavelength-division multiplexing (DWDM)-based networks, which allow network operators to restore customer services by automatically rerouting traffic when faults occur.

The reconfigurable optical add-drop multiplexer (ROADM) technology enhancements introduced on the Infinera 7300 Series Multi-Haul Transport Platform will allow NBN Co to increase its network resiliency and reliability through automatic service restoration capabilities across its transit network.

“The Transcend SDN solution was deployed and integrated with our systems, giving us the capability to increase service availability to some of the most remote locations across Australia,” NBN Co chief network deployment officer Kathrine Dyer said. “This will give our network increased resiliency and help ensure that our customers get the best possible experience when migrating to NBN Co’s broadband access network.”

Specifically, NBN Co’s network enhancements are based on Infinera’s 7300 multi-haul DWDM platform with Infinera’s Transcend SDN solution spanning several transport layer technologies – such as optical DWDM layers and electrical Optical Data Unit (ODU) switching layers – to provide end-to-end service control and enable SDN-based service control for Infinera’s optical and packet-optical transport portfolio. 




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TPG pays the price for scrapping mobile network and low-margin NBN migration


TPG Telecom’s profit for 2019 took a 56 per cent hit, plummeting from $396 million in 2018 down to $174 million for the year ended 31 July 2019.

The publicly-listed telecommunications provider attributed the fall to the end of the mobile network roll-out announced in January 2019, which gave rise to an impairment expense of $236.8 million and a significant increase in amortisation and interest expense related to spectrum licenses.

There was also a $9 million one-off transaction cost related to the proposed merger with Vodafone Hutchinson Australia (VHA).

Revenue remained mostly unchanged, with a 0.7 per cent drop to $2.4 billion and EBITDA was down 2.1 per cent to $809.4 million.

Earnings continued to be impacted by the loss of margin as DSL and home phone customers migrate to low-margin NBN services. The company had a $50 million guidance but closed FY19 with $47 million.




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Telstra CEO expresses ‘surprise’ at NBN Co moving on enterprise market


NBN Co seeking to grow its share of the enterprise networking market is a “little bit of a surprise” for Telstra, the telco’s CEO Andy Penn says.

Addressing media during a briefing at the telco’s enterprise conference, Telstra Vantage, Penn said that it was particularly surprising because the rollout of the NBN was “slowing down” as it enters its final stages while NBN Co was simultaneously “diverting capital into building more fibre in CBDs”.

“Effectively what it means at a practical level is capital is being diverted from rolling out the core purpose of the NBN to this, so that’s a surprise,” Penn said.

“I had understood the purpose of the NBN was to provide broadband connectivity to every household in Australia not to build fibre for enterprise customers,” the CEO said, adding that “lots of telcos” already have fibre throughout CBDs.

NBN Co has indicated it intends to eventually grow its revenue from businesses to $1 billion a year. Last month it revealed that its FY19 revenue from the business segment had grown 54 per cent year-on-year.




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Telstra cops $400m revenue hit from NBN Co connection delays – Finance – Telco/ISP


Telstra has come good on analyst sentiment that NBN Co’s latest corporate plan issued on Friday will buffet its market guidance, telling the ASX on Monday opening that its overall revenue and cash flow will take a hit because of slower than anticipated rollout.

The telco has shaved back its predicted total income by around $400 million, booking in its new range at between $25.3 billion to $27.3 billion for FY20, down from $25.7 billion to $27.7 billion.

“Telstra no longer anticipates FY20 being the year of peak nbn headwind and now estimates this will occur in FY21. The changes to forecast activations in NBN Co’s Corporate Plan 2020 also has the effect of deferring Per Subscriber Address Amount (PSAA) receipts from NBN Co in FY20 into future periods.”

However the delay in the rollout has a silver lining for the local telco giant because it effectively defers some of the hit it will have to take on the government mandated network, prompting Telstra to modestly up its earnings before interest tax, depreciation and amortisation by $100 million to between $7.4 billion to $7.9 million.

But it cautioned the effect was merely down to a matter of timing.

“Telstra confirms that the NBN Co Corporate Plan 2020 does not alter the view, provided to the market on 15 August 2019, that underlying EBITDA excluding in-year nbn headwind is expected to grow by up to $500 million in FY20,” Telstra said in a statement.

Ironically, delays in NBN connections broadly benefit Telstra because it gives the telco  more time to muscle-up new faster mobile services like 5G that could challenge the user experience of lower speed NBN plans offered by retail service providers, especially in metro areas.

Telstra had warned the market on Friday the changes set out in the NBN Co. corporate plan “including a reduction in the total number of premises forecast to be connected during FY20 from 2 million to 1.5 million” had potential to materially crimp its numbers.

NBN Co on Friday projected its average revenue per user (ARPU) for residential customers would be $49 by FY23, a new figure derived by it splitting revenue forecasts by business and residential users for the first time.

 “We don’t intend to break out business ARPU as we do not believe it is meaningful on a per-premises basis,” CEO Stephen Rue said on Friday.


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Telstra revises forecasts for third year running after changes to NBN plan


Changes made by NBN Co to the timing of the National Broadband Network mean that Telstra for the third year in a row has had to revise its financial forecasts.

NBN Co last week released an updated corporate plan that revealed changes to its activation targets for FY20.

“Given the current priority on network optimisation and the degree of civil build required for FTTC [fibre to the curb], there has been a shift in phasing during FY20 for the deployment and activations,” the updated document states. “This extended the end point for the respective 18-month migration periods for some customers beyond the previously forecast timing.” (Once an area is declared ready for service by NBN Co, households have 18 months to migrate from the copper network to the NBN.)

NBN Co cut by 500,000 to 1.5 million the number of premises it expects to be connected in FY20. The company said it expects to connect 8.1 million premises by 30 June 2021, which is around six months later than it previously expected.

“Telstra’s FY20 guidance provided to the market on 15 August 2019 was predicated on NBN Co’s previous Corporate Plan 2019 and assumed the nbn rollout and migration in FY20 would be broadly in accordance with the 2019 plan,” Telstra said in a statement released to the ASX.




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NBN Co expects to be cash-flow positive a year later than previously forecast


NBN Co now expects it won’t be cash-flow positive until FY23, a year later than projections released last year by the company.

The company expects to be cash-flow negative to the tune of $200 million in FY22; previously it projected positive cash flow of $100 million. It is forecasting cash flow of $700 million in FY23.

The company today also confirmed it will need to continue hooking up premises to the National Broadband Network beyond the official build completion date of 30 June 2020.

NBN Co said it was “on schedule and on budget to complete construction” but confirmed that it expected construction to continue to connect newly built homes and around 100,000 premises classed as “complex connections”

“Next year we will complete the build as we add another 1.5 million homes and businesses to the ready to connect footprint,” CEO Stephen Rue said today. “And while we are signposting this as the completion date, naturally construction activities will continue into the future as new homes and houses are added to the nation’s stock.




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