NBN Co's HFC freeze weighs on Optus results

Optus’ parent Singtel said that the temporary suspension of customer migrations to NBN Co’s HFC network as well as “price erosion” weighed on the group’s fourth quarter results.

The company said today that it had seen “lower NBN migration revenues resulting from temporary suspension of connecting and migrating customers to the NBN’s HFC access network in Australia”.

It also suggested that this could have a flow-on impact in fiscal year 2019, given NBN Co is lifting its stop-sell on the HFC network very gradually through the back half of 2018.

“In Australia, operating revenue grew by 2.6 percent while EBITDA [earnings before interest, taxation, amortisation and depreciation] declined 4.9 percent” in the fourth quarter, Singtel said in financial filings.

However, it said, “excluding NBN migration revenues, operating revenue rose 5.6 percent and EBITDA increased 2.6 percent due to strong mobile customer growth”.

The HFC stop-sell, in particular, weighed heavily on Singtel’s group “data and internet” division numbers.

They fell 6.9 percent compared to the same quarter in 2017 “due mainly to a decline in NBN migration revenues from temporary suspension of connecting and migrating customers to the NBN Co’s HFC access network in Australia and price erosion”.

That offset some of the brighter performing line items in that division, including cyber security, which was up 3.4 percent.