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NBN ups revenue target amid tech switch

AAP logoAAP 26/08/2016 Lilly Vitorovich

NBN Co has hiked its revenue target by 25 per cent to $5 billion for 2020 but has switched up to 1.5 million premises from cable internet to cheaper fibre-to-the-node connection after a review of costs.

Outlining the latest corporate plan for NBN Co on Friday, chief executive Bill Morrow said he expects a 30 per cent jump in data consumption - driven by users watching videos and movies on mobile devices - will lift usage and revenue for the wholesale network.

NBN Co is now forecasting average revenue per user of $52 a month by 2020, up from its previous target of $44 a customer by 2018.

Mr Morrow said NBN Co is on track to connect eight million premises by completion in 2020, up from three million now.

NBN Co has reduced the forecast number of premises that will be connected by hybrid fibre-coaxial (HFC) network after a review of costs.

It now plans to connect between 5.1 million to 6.5 million premises using fibre-to-the-node (FTTN) technology, up from 4.5 million previously while HFC connections will drop to 2.5 to 3.2 million, from four million previously..

The change resulted from a rise in the cost of HFC connections - on the network originally built by Telstra and Optus for pay TV - from $1,800 to $2,300 each.

NBN Co says FTTN and HFC will be capable of delivering download speeds of up to 100 megabits per second but the actual speed a customer will get will depend on their choice of broadband plan.

The maximum cost of the NBN has been revised down by $2 billion to $54 billion, thanks to better clarity on the remaining rollout and associated costs, with the cost now ranged between $46 billion and $54, and NBN Co saying the project is on track to come in at $49 billion.

"The road ahead is steep. We are realistic about the challenges and we are well aware of the risks," Mr Morrow said.

NBN Co is looking to raise up to $24.5 billion to complete the project, with about $9.2 billion left of the $29.5 billion in federal government funding and Mr Morrow said the work of securing external debt had begun.

NBN Co charges internet service providers to access its broadband network and in turn resell the service to their customers.

In addition to increased data consumption boosting NBN revenue, Mr Morrow said revenue from businesses - which will account for 10 per cent of the eight million footprint in 2020 - is expected to be significantly higher than residential.

NBN Co has reduced the forecast number of premises that will be connected by hybrid fibre-coaxial (HFC) network after a review of costs. © AAP NBN Co has reduced the forecast number of premises that will be connected by hybrid fibre-coaxial (HFC) network after a review of costs.
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