Finance Finance News NBN posts $1.2b loss, behind on homes

NBN posts $1.2b loss, behind on homes

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The NBN has made a $1.12 billion loss this financial year as the company constructing the national broadband network admits it needs to work harder on connecting homes and businesses.

NBN Co on Wednesday said the network now passes 512,659 premises, after being rolled out past almost 96,000 during the three months to March 31.

But only 166,642 premises have an active NBN service. One third of those premises which the network has passed, and which are not new buildings, remain unconnected.

“The continued expansion of the network saw life-to-date capital expenditure (excluding leased assets) increase to $4.9 billion and life-to-date operational expenditure rise to $2.4 billion,” it said in a statement.

“As at 31 March 2014, the network had passed 512,659 fixed line and fixed wireless premises, an increase of nearly 96,000, or 23 per cent over the previous quarter.

“The primary focus for management has been on building the network rather than connecting families and businesses,” NBN Co chief executive Bill Morrow said.

“We need to do both and we need to do them better.”

Contractors are now being instructed to connect premises at the same time as the network is rolled out, NBN Co said.

“There is more to analyse, more to improve and much more industry collaboration needed but we are making progress as evidenced by the metrics we are reporting today,” Mr Morrow said.

NBN competition

The NBN is also set to ramp up spending to fight off potential competitors including TPG Telecom.

TPG has said it plans to target large apartment dwellings to connect many homes at once, a strategy which is key to the NBN’s profitability.

NBN will now speed up the launch of its fibre to the premises and basement services for apartments.

NBN Co’s chief customer officer John Simon told Fairfax the government funded project had to act quickly to protect its business case.

“If TPG can do it then why can’t six or seven other players do it?” he said.

“Then all of a sudden what you find is the more commercial or lucrative sectors of the market get picked off and you end up with a swiss cheese network.

“This is not just a TPG response plan. This is our plan to bring forward those revenues and also at the same time make it clear that we will respond to competitive threats.”

He said the NBN had to act to protect its commercial interests.

“In the absence of a clear statement about any regulatory position we have no choice but to protect the integrity of the plan NBN has and also remembering we have 43 other RSPs that are our customers…and if we didn’t do anything then effectively we’re diminishing our relevance,” he said.

“It is taxpayer funded and that’s why it’s important we protect that investment and get the right return for the taxpayers.

“We have no other choice but to make sure we deliver services to these key market segments and also respond to competitive moves.”

TPG fined for access

TPG has been fined $400,000 for failing to provide access to emergency numbers for customers who had not paid bills.

Federal Court Justice Mordecai Bromberg today found that TPG failed to give access to triple-zero and 112 on more than 190 occasions between March and September 2011.

He also found the company did not ensure that almost 6000 lines had access to emergency numbers over that period.
A software upgrade at TPG in 2011 barred all outgoing calls, including to emergency numbers, made from suspended and inactive accounts.

The error was discovered when a woman was barred from calling an ambulance for her sick husband from her home phone in September 2011.

The man suffered a heart attack and because of poor mobile phone reception, his wife could not relay important details about his condition.

He died in hospital days later.

The Australian Communications and Media Authority found that 193 emergency calls from TPG had been barred, and that 5979 suspended or inactive accounts did not have access to triple-zero during the period.

Justice Bromberg said while the error might have been inadvertent, TPG had not taken reasonable steps to avoid it happening.