NBN Co's actual cost per premises for FTTC is $3058

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NBN Co's actual cost per premises for FTTC is $3058

As questions remain over feasibility of build targets.

NBN Co has revealed its first actual cost per premises for the fibre-to-the-curb portion of the network, coming in at $3058.

The company’s half year results, released today, provide a substantive update on the FTTC build.

The actual cost per premises of $3058 is marginally higher than the "weighted average CPP for FTTC" that NBN Co forecast in its most recent corporate plan - expected "to be $3000 at the end of the build period".

CPP forecasts for FTTC have steadily risen since the technology was first announced, starting at “about $2800” per premises in early trials before moving to $2900, $3000 and now slightly above that.

The higher build costs are in part the result of additional complexity NBN Co said late last year that it had encountered with FTTC access technology.

CEO Stephen Rue confirmed that conditions in the FTTC portion lent it to being “a challenging civil build”.

However, he appeared to indicate the $3058 CPP could reduce in future, and was unconcerned at the current level.

“In relation to FTTC, our CPP of $3058 reflects the early stages of construction for this new technology with a current mix of premises generally having longer build distances compared to those in the latter part of the FTTC rollout,” he said.

“While CPP reflects the early stages of construction, the costs remain relatively consistent with our corporate plan projections.”

Tracking against build targets

The company also today released a series of other numbers for the FTTC portion of the build.

NBN Co missed its FTTC build targets by a substantial amount in the last financial year. That led to downgrades in targets for future years, including this year.

Although it had shown some early signs that the revised FTTC targets were achievable, the half-year numbers show NBN Co is still short of where it needs to be.

By the end of December 2018, it had 300,000 FTTC premises ready for service, CEO Stephen Rue confirmed in response to a question from iTnews.

Its full year target is 700,000 premises, meaning it has hit almost 43 percent of that.

However, the company’s ready to connect and activated premises numbers for FTTC have it tracking considerably below full year forecasts, hitting around 38 percent of the full year number.

FTTC premises actuals at half year results vs full year targets laid out in NBN corporate plan.
Topline results

NBN Co said today it did revenue of $1.3 billion in the six months to December 31 last year.

Average revenue per user (ARPU) was up slightly to $45, and Rue contined to point to NBN Co's focus on enterprise and business as a key driver in that uplift.

NBN Co recently landed a large enterprise account in Woolworths, and it is hoping to continue in that vein.

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