Telstra sees first $7m in copper disconnection fees

Telstra has received its first $7 million in government payments to disconnect customers from the copper network as part of the transition to the NBN.

The figure is the first sum to be paid out of a $4 billion pot of money to be given to Telstra under the $11 billion definitive agreements signed by Telstra and NBN Co.

Telstra also reported today it had received $89 million in fees for the lease of network infrastructure to NBN Co and the sale of lead-in conduits.

In total, Telstra reported NBN income of $399 million.

A significant portion of that came from money set aside for the retraining of Telstra workers that are to be affected by the NBN or associated regulatory reforms, from money for a public education campaign to educate consumers on migration processes from copper to fibre, and from money for NBN build work.

In addition, $124 million of the NBN income came from the Telecommunications Universal Service Management Agency (TUSMA) agreement, which covers the ongoing delivery of universal service obligations for voice and payphone services in an NBN world.

Telstra chief financial officer Andrew Penn told financial analysts that if the NBN rollout was to slow or change significantly, it could affect "some receipts from NBN", including the disconnection payments and infrastructure rental and sale into NBN.

It could also have an impact on Telstra's broader guidance for cumulative excess free cash-flow. Penn reiterated previous expectations of generating "$2bn-$3bn of cumulative excess free cash-flow over the next three years ... assuming the NBN rollout continues to be broadly in line with NBN's current plan".

"It would need to be a fairly material change to the current [NBN rollout] plan for us not to be in the region of $2bn-$3bn by the second half of 2015," Penn told analysts today.

Penn said conversely, a slower NBN rollout meant Telstra would retain PSTN customers — and their revenue streams — for longer.

"There's a few swings and roundabouts," Penn said.

Although PSTN voice revenue remains in decline — down another 9.5 percent in FY13 —the carrier is still seeing strong results in retail fixed broadband service provision.

Telstra reported a 173,000 increase in fixed broadband customers for the year, and said 59 percent of its fixed broadband customer base buys a bundle of telecommunications services.

In money terms, fixed broadband revenue — including NBN data — is up 9.3 percent, and average revenue per user is up 1.6 percent to $54.52.