NBN Co revenues still up despite free CVC offer

NBN Co has managed to increase its revenue by 36 percent in FY2020 despite its COVID-19 relief program to provide telcos 40 percent more bandwidth for free.

The network provider raked in total revenue of $3.8 billion for the 12 months to 30 June 2020, up 36 percent from the previous year. EBITDA is also up 190 percent to $1.77 billion, while monthly residential average revenue per user (ARPU) is up to $45, compared to $44 in FY19.

NBN Co said the numbers come despite the 40 percent free increase in Connectivity Virtual Circuit (CVC) capacity to retail service providers (RSPs), claiming that the program cost the company more than $80 million in CVC charges.

Chief executive Stephen Rue said, “When the impact of the COVID-19 crisis became apparent in March, we worked quickly to establish an industry and world-leading response to increased network utilisation, offering pricing relief for up to 40 per cent additional CVC capacity to participating internet retailers at no extra cost.”

“Since the introduction of the offer, we have forgone revenue of more than $80 million in CVC capacity charges from participating internet retailers as part of our efforts to help support increased data use during COVID-19.”

The free 40 percent CVC boost is scheduled to finish in September, to allow for RSPs “to adapt to their customers’ changing data demands”.

The company also claimed it has finished the network’s “initial build”, as it exceeded its build targets for both FY20 and its Corporate Plan 2020-23 at 11.73 million premises ready to connect and 7.3 million premises connected.

“The most important thing we’ve delivered this year has been ten years in the making. We completed the initial build of the national broadband network on time so that Australians had access to secure, resilient, high-speed broadband when they needed it most,” Rue said.

Looking ahead, NBN Co said it expected to connect some 8.2 million premises to the network by 30 June 2021, according to estimates based on growth in its customer base and revenues, combined with lower subscriber payments to Telstra and Optus in the future.