Telstra’s major strategy update has revealed that the telco believes delays around the rollout of NBN’s hybrid fibre co-axial (HFC) network are set to last longer than expected and its fibre rollout may also be delayed.
In November, NBN announced it was putting its HFC network rollout on hold for six to nine months due to massive problems with customer service on a network many predicted would be plagued with problems (NBN had previously abandoned Optus’ HFC network entirely). The decision exemplified the worst outcomes of the Abbott-Turnbull government’s attempt to force NBN to use older, slower and less reliable technologies instead of fibre to the premises (FTTP).
As a result, the payments that Telstra receives from NBN were forecast by the telco to fall. Telstra receives one-off disconnection payments as subscribers move over to the NBN and infrastructure access fees for NBN’s access to Telstra ducts and other infrastructure, under the terms of the companies’ Definitive Agreement signed in 2011 and modified in 2014. In the wake of NBN’s HFC announcement last year, in December Telstra announced it was slashing its forecast net NBN receipts in its 2018 financial year guidance from $2-2.5 billion to $1.4-1.9 billion.
In May, Telstra confirmed that guidance, forecasting net NBN-derived revenue in the current financial year would be “mid to upper end” $1.4-1.9 billion, despite NBN announcing in April a staged resumption of the HFC rollout.
Yesterday, Telstra both confirmed that guidance for 2018 and offered its first guidance for 2019. Shockingly, NBN-derived receipts are set to barely shift at all next year, with the forecast stating: “Net one-off Definitive Agreements receipts less nbn net cost to connect in the range of $1.8 billion to $1.9 billion.” NBN net revenue will only grow from “mid to upper end of $1.4-$1.9 billion” in 2018 to $1.8-1.9 billion next financial year. And the previous forecast of up to $2-2.5 billion in 2018 is nowhere in sight.
NBN insists that the scheduled NBN rollout completion date is not at risk. “The rollout will continue at pace in FY19,” an NBN spokesperson told Crikey. “The rollout of the nbn network remains on track for completion in 2020.”
Telstra management appears to lack NBN’s confidence that everything is fine. Despite the resumption of NBN’s HFC rollout, Telstra’s estimate that there would be minimal increase in NBN-derived revenue and it would remain well below the level previously forecast is, according to yesterday’s guidance, based on “management’s current best estimates” of the rollout. Those Telstra management estimates “may be updated for any material changes, including after taking account of the nbn Corporate Plan 2019 when it is published.” That is expected in August. That will be taxpayers’ next chance to reconcile what seems to be a difference of expectation over whether NBN can finish its rollout in 2020 as it insists.
Telstra did not respond to Crikey’s queries about its numbers.
Yes everyone with with the LNP’s version of the NBN can thank Malcolm Turnbull and Tony Abbott for the rubbish connection you’ve got. At the next election vote the LNP out.
Alas, that would require an electorate with room temperature IQ and a memory slightly longer than a mayfly’s existence.
Breath. NOT. Being. Held.
The scandals of this government will be thrown open to the full glare of public scrutiny as soon as the election is over, because of this turnbull and his corrupt crowd will do anything to hold onto power, the tax cuts to big business and the wealthy is no more than a massive bribe to solicit funds from them to finance a massive election war chest to hold onto power, some of these corrupt politicians could even face jail and massive fines so the stakes are high and the public should expect a very dirty campaign right up and during the election.
here here!!!!!!
The
Ever
Lasting
Symbol of
Turnbull’s
Real
Abilities.
NoB eNd.
The worst aspect of all this is that no-one is surprised and no-one expects anything better from the NBN. We have now come to accept unacceptably low standards, to pay through the nose for no service and to ignore the lies that accompany these. This is a complete disaster, for which blame must directed to Turnbull.
What a corrupt decision to sell off another essential service only for its sellers to buy a chunk of it back at inflated cost and call it NBN, with a plan to sell it back to these filthy monopolists for nothing. Liberals, ie the CEOs union, enriching their corporate masters at our expense.