NBN enters payback year

NATIONAL Broadband Network CEO Stephen Rue sounded pretty chuffed, rolling out the unarguably good to utterly scepticdenying numbers for the 2018-19 year – culminating in a triumphant declaration that the entire network would be completed “from sea to shining sea” by June next year.

Actually, he didn’t make the “sea to shining sea” reference – Rue’s another one of those Irishmen who did not go to America. That was my tribute to his predecessor, the decidedly can-do Yank Bill Morrow .

Morrow did the hard yards of turning the RuddConroy-Quigley all-fibre fantasy – that would be about 40 per cent done, at best, by now, and at huge cost and generating very little revenue – into the mix of fibre, cable and, yes, copper that is actually delivering functional fast broadband to most Australians, and nearly $3 billion of revenue in the last year and a bottom line return to NBNCo.

Morrow passed the baton to Rue, who’s both delivered on the construction and tweaked the charging so most Australians will be using 50Mbps or higher speeds.

Perhaps the best number was the smallest: average revenue per user ticked up from $45 to $47 a month.

This is the heart of everything – to make the NBN work effectively both for the government as owner and 10 million-plus Australian premises as users.

ARPU will kick up sharply in 2019-20 off ascending layers of leverage – the accelerating network completion, more premises able to connect and an accelerating percentage of ‘able tos’ actually connecting at higher speeds.

This will in turn combine to deliver both accelerating gross revenue increases and rising margin – which will then enable Rue to tweak wholesale access charges to promote a win-win feedback loop of higher speed usage at lower cost and higher revenues and margin.