NBN confident but closemouthed on future funding

NBN has only a year left before it hits the funding cap imposed by the federal government

During FY16 NBN received a $7.1 billion equity injection from the federal government, bringing total equity funding to date to $20.3 billion.

The government has imposed a $29.5 billion cap on its equity contribution but NBN expects peak funding required for the rollout to be between $46 billion to $56 billion, with management aiming for $49 billion.

“As at 30 June 2016, $20.3 billion of equity funding has been provided to the company by the Commonwealth government, out of a committed total of $29.5 billion,” NBN chief financial officer Stephen Rue told a full year results briefing today.

“Further equity funding available to NBN therefore stood at $9.2 billion at year end – or sufficient to fund us for fiscal 17,” the CFO said. “We are currently evaluating longer term funding options in order to fund the business through to the time where sufficient cash flows are generated to run the business in a self-sustaining way.”

“We’ve got funding from the government that will cover us for fiscal 17 so it’s obviously something that will exercise a lot of my time this year,” the CFO said.

CEO Bill Morrow said that the exact mechanism NBN will use to raise debt is a matter for the government.

“Do they want us to take public debt? Do they want to fund it direct from them and loan us the money and them raise the debt? These are issues that the Department of Finance is considering,” the CEO said. The department is “well on track” with assessing funding possibilities, he said.

“We’re not pressed for time on this issue; we’re not lacking any kind of confidence that they won’t be able to produce whatever the source is that they want to use to fund us.”

The continuing rollout of the National Broadband Network was reflected in the company’s results for FY16, which showed a significant climb in both capex and opex.

“The continued acceleration of the network rollout has resulted in $4.7 billion of capital expenditure during fiscal 16, bringing total life to date capex to $13.6 billion,” Rue said. “This expenditure continues to reflect investment in the network, primarily in the design and build of our FTTP, FTTN and HFC networks, as well as our ongoing investment in IT systems to help support the business and of course our customers.”

Capex grew by $1.4 billion compared to FY15.

“The largest area of growth in capex during the year has been the FTTN network,” Rue said. “A total of $1.7 billion in capital expenditure was incurred over the last 12 months for design and construction related activities in the rollout of this technology. In addition, $448 million of capex was incurred in fiscal 16 on the development of the HFC network. This primarily related to upgrading DOCSIS technology as well as pre and post commercial launch design and construction activities.”

NBN also incurred capex totally $1 billion related to its FTTP network, the majority of it — $908 million — related to fibre in brownfield areas. NBN spent some $354 million on its fixed wireless networking, which included acquiring an additional 356 wireless sites, integrating 420 base stations and making 152,000 additional premises ready for service.

Capex related to NBN’s two satellites — the second is launching in October — was $135 million. NBN also incurred capex of $734 million on its transit network as the number of end users grows. Finally, common capex totally $734 million during FY16, Rue said.

“This is primarily related to our IT network spend to support the launch of commercial services across technologies including the enhancement of business support systems, data centres and the national test facility,” the CFO said.

Other expenses grew from $1.29 billion in FY15 to $1.99 billion in FY16, including subscriber costs, which grew from $193 million to $582 million and operating expenses, which grew from $1.1 billion to $1.41 billion.

Join the PC World newsletter!

Error: Please check your email address.

Tags NetworkingNational Broadband Network (NBN)nbn conational broadband networkbroadband

Our Back to Business guide highlights the best products for you to boost your productivity at home, on the road, at the office, or in the classroom.

Keep up with the latest tech news, reviews and previews by subscribing to the Good Gear Guide newsletter.
Rohan Pearce

Rohan Pearce

Computerworld
Show Comments

Essentials

Lexar® JumpDrive® S57 USB 3.0 flash drive

Learn more >

Microsoft L5V-00027 Sculpt Ergonomic Keyboard Desktop

Learn more >

Mobile

Lexar® JumpDrive® S45 USB 3.0 flash drive 

Learn more >

Exec

HD Pan/Tilt Wi-Fi Camera with Night Vision NC450

Learn more >

Lexar® JumpDrive® C20c USB Type-C flash drive 

Learn more >

Lexar® Professional 1800x microSDHC™/microSDXC™ UHS-II cards 

Learn more >

Audio-Technica ATH-ANC70 Noise Cancelling Headphones

Learn more >

Budget

Back To Business Guide

Click for more ›

Most Popular Reviews

Latest News Articles

Resources

PCW Evaluation Team

Azadeh Williams

HP OfficeJet Pro 8730

A smarter way to print for busy small business owners, combining speedy printing with scanning and copying, making it easier to produce high quality documents and images at a touch of a button.

Andrew Grant

HP OfficeJet Pro 8730

I've had a multifunction printer in the office going on 10 years now. It was a neat bit of kit back in the day -- print, copy, scan, fax -- when printing over WiFi felt a bit like magic. It’s seen better days though and an upgrade’s well overdue. This HP OfficeJet Pro 8730 looks like it ticks all the same boxes: print, copy, scan, and fax. (Really? Does anyone fax anything any more? I guess it's good to know the facility’s there, just in case.) Printing over WiFi is more-or- less standard these days.

Ed Dawson

HP OfficeJet Pro 8730

As a freelance writer who is always on the go, I like my technology to be both efficient and effective so I can do my job well. The HP OfficeJet Pro 8730 Inkjet Printer ticks all the boxes in terms of form factor, performance and user interface.

Michael Hargreaves

Windows 10 for Business / Dell XPS 13

I’d happily recommend this touchscreen laptop and Windows 10 as a great way to get serious work done at a desk or on the road.

Aysha Strobbe

Windows 10 / HP Spectre x360

Ultimately, I think the Windows 10 environment is excellent for me as it caters for so many different uses. The inclusion of the Xbox app is also great for when you need some downtime too!

Mark Escubio

Windows 10 / Lenovo Yoga 910

For me, the Xbox Play Anywhere is a great new feature as it allows you to play your current Xbox games with higher resolutions and better graphics without forking out extra cash for another copy. Although available titles are still scarce, but I’m sure it will grow in time.

Featured Content

Latest Jobs

Don’t have an account? Sign up here

Don't have an account? Sign up now

Forgot password?