1. 1
NBN Co - Threats
Idle Network, 5G, Starlink
72.0%
62.4%
28.0%
37.6%
FY 24
FY 21
Network Capacity
Activated Premises Ready to Connect Premises
19.2% 9.6% 42.5% 23.3%
4.1%
1.4%
Technology Penetration of Activated Premises – FY 21
FTTP FTTC FTTN/B HFC FW Satellite
Threats and Challenges
• > 30% idle network (by Feb 2022)
• 5G and IOT
o Bypasses need of fibre
o IOT forces stickiness
o facilitates digital transformation
o mobility driven redundancy
• MTM
o driven CX for FTTN/B customers
• Higher wholesale pricing
• Non Premise
New Entrant - Starlink
• Internet service provided by > 1700
LEO satellites
• Although slower than 5G, the service
is faster than other satellite
services like NBN Co's Sky
Muster, making it particularly
attractive to regional
communities.
• NSW Police has signed up to their
service
2. 2
NBN & 5G
Open
Fibre
NBN
Technology
Mobile
(5G)
Converge & Grow
NBN + 5G
Adapt & Grow
NBN adds
Wholesale Wireless
Stagnant
Closed Evolution
Grow
Bypass NBN
• 5G roll out is a threat to NBN Co’s revenue stream as RSP’will use
this to cannibalise their own revenue
• 5G is beyond mobility and is being used for fixed access alternative
o wireless as the lead-in technology – copper, coax, fibre,
wireless
• Verizon, AT&T are already there
• Competitive Response: TPG + Vodafone merger is in anticipation of
this convergence. Good synergies for targeting Enterprise and
Consumer on this convergence
• Grow & Converge option Aligns with one of the
likely future options of selling at state level or
geography
• NBN Wholesaler of fixed and mobile in urban and
country areas
Source: IBIS, NBN Co, AFR, Gov.au
Technology Threat
3. 3
$29.9 Bn
=
Govt. Funded
Equity
51.8%
$2.5 Bn
=
USO
(2022)
$23.8 Bn
=
RFR Govt
Bonds
Debt @3.96%
37.5%
$59.9
Billion
$7.5 Bn
=
Private
Funded Debt
1.8%- 10.7%
$11.3 Bn
=
Leases Duct,
Pits,
Exchanges,
Migration
$13.8 Bn
Payments to Telstra
NBN Co Funding
Key Messages
• Out of the $23.8 Bn (incl $2.4 Bn), only $19.5 Bn is Federal Govt. debt, additional $4.4 Bn is sourced from non govt. sources.
• Labor pledged before the elections in 2022 for $2.4 Bn as debt for 1.5 Mn Premises upgrade
• As of Feb 2022, in all $24.9 Bn (17.5 + 7.4) is raised as total debt, some of the debt is refinanced at a lower rate than 3.96%
• Telstra will get around $35.7 Bn over 30 years including $11.3 Bn for migrating & disconnecting its customers from the copper
network
$35.7 Bn
Over 30 Years
• ARPU has increased to $46. Increasing the ARPU to $54 for Rev
generation is not enough for repaying the cost envelope & making it attractive
to sell out.
• Spent > $51 Bn for the rollout
• Debt Rating: AA Stable, A1 Stable
Source: NBN CO, AFR, Zdnet, iTNews
NBN Co
Entity - Funding Profile
4. 4
Disclaimer: This presentation acknowledges and gives credit to the work of others. Necessary validation have
been taken to avoid copyright infringement. Any instances that violate terms can be removed when notified. All
discussed thoughts & opinions are my own & not that of my employer or other parties.
For further information, please contact:
Name: Vishal
Address: Melbourne, VIC 3000 Australia
Mobile: 0468 675 566
Blog: http://blog.sharmavishal.com/
Notas del editor
IOT – simple data plan
EE - ??
NBN Co is starting to lay the groundwork for a future foray into millimetre
-
wave 5G, which it revealed
as a likely future upgrade path for its fixed wireless network.
• NBN Co has asked the Australian Communications and Media Authority (ACMA) to make 26 GHz
spectrum available in all areas where NBN Co currently runs fixed wireless services.
• The ACMA is currently consulting with industry on future uses of several band
s including 26 GHz and
28 GHz.
• While NBN Co is keen to have its own millimetre
-
wave needs catered for, it also wants to make sure
any 5G services allowed to operate in these higher bands don’t interfere with the operation of its Sky
Muster satellite ser
vices.
• In particular, it wants 5G operators to be barred from offering services in the 28 GHz band, which it
currently uses for its 10 Sky Muster ground station gateways.
• Source:
IT News
Here is a sample of what Rod Sims from the ACCC has said recently about 5G and the NBN
:
This leads us to an interesting competition issue: what does 5G mean for the NBN?
The NBN is a monopoly wholesale network so we should strongly welcome it facing
competition.
We are currently seeing some operators offering consumers hybrid modems with their NBN
connection, where data traffic can be directed over the mobile network rather than the NBN.
This is just a small step towards operators favouring their ow
n mobile networks over
the NBN, but will we see it go further?
The impetus for this so
-
called ‘NBN bypass’ first came about following delays with the NBN build, and
consumers not receiving speeds they were sold.
Over the last few months, both the ACMA and
the ACCC have put some measures in place to try and
resolve these problems. However, as many of you are aware, a question remains about the cost of
wholesale NBN access services.
We have long heard providers complain about low margins on the NBN, which is
largely due to the
variable costs of provisioning capacity to support high speeds and growing data traffic.
So for those RSPs with an alternative mobile or wireless network, it may be more cost effective to
offload some fixed NBN data traffic onto their
own network (where consumers have a hybrid modem)
ENTERPRISE CI
-
Yammer
F
ebruary
2019
–
Telstra Enterprise NBN Knowledge Centre
-
Yammer
or seek to supply some services entirely over their own mobile network, completely bypassing the
NBN.
Of course, a family with three teenagers is highly unlikely to ever switch away from a high
-
speed fixe
d
line connection. But there is an opportunity for wireless operators to attract those consumers who
don’t necessarily want the high speeds and unlimited data offered by fixed service providers. For
consumers at lower price points, with small data needs, a
wireless service might suit better than the
NBN.
We are always happy to see offers in the market match consumer demand and anything that delivers
the services that consumers want at the prices they are happy to pay is welcome news to us.
But what does th
is mean for NBN Co? And what does it mean for the smaller operators
who don’t have their own mobile network?
These are all complex questions; and we will need to wait and see what happens when 5G becomes
widely available and how markets react.
What we must
never do, however, is seek to restrain others in order to protect the NBN business
model. This would be a disaster for consumers.
Result Highlights
1H Revenue rose 46% to $1.3bn
EBITDA was -$477m, improving 65% v. 1H/18
1H CAPEX spend was $2.9bn, up 2% from 1H/18, which focused primarily on the HFC, FttC & FttN network roll-outs.
ARPU rose $1 to $45
Ready to Connect premises were 8.1m (up 32%), with active services reaching 4.7m, up 38%, (of which FttC were ~300k).
As of January, 57% of activations are on 50mbps or higher speed tier plans.
Right first time installs were 93% for the Dec qtr., dipping slightly from 94% in the Sept qtr.
Mgt. Briefing Highlights
Any 5G threat? – Stephen Rue (CEO) highlighted the vast majority of data (~97%) is transmitted over fixed networks. He said he sees the trend of growing demand for data continuing on fixed networks as much as in mobile networks.
NBN Write-down? - Stephen Rue responded to questions about a write-down commenting there was no accounting need for a write-down, arguing calls for a write-down were really about a wholesale price reduction.
He said the NBN needs a strong business model & cashflows to ensure the future of the network.
And he used the opportunity to highlight that the conversation needs to move to how the NBN contributes to people’s lives in various ways (e.g. improvement in access to data & information, supporting people build businesses & operate from any location, healthcare improvements, education quality benefits etc.).
New Product launch – NBN expect to launch the new Wholesale Wireless Product in market by mid-2019, which will have max. download capability of 60mbps, & upload of 20mbps.
For anyone interested, more results detail can be found by clicking here.
Another 480 million ofr regional connectivity in June 2022It had $23.8 billion debt at the end of June, according to its annual report, including $10.6 billion in bank and capital markets debt and $13.2 billion in borrowings from the government.
The US debt deal comes after NBN Co reported $4.6 billion revenue in the year to June 30 and 8.2 million customers on its network. It lost $3.84 billion in the 2021 financial year and $5.24 billion in FY20.
IOT – simple data plan
EE - ??
As at 30 June 2021, the company had raised more than $14.1 billion in private debt, with $8 billion raised during FY21. By 30 June 2021, the Company had