Life Tech NBN reports rise in revenue as regional broadband tax passes Senate

NBN reports rise in revenue as regional broadband tax passes Senate

a satellite dish being installed on a roof
The federal government has passed its regional broadband tax as part of a package of telco reforms. Photo: NBN Co
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NBN Co has reported a surge in revenue amid unprecedented demand for high-speed internet due to the coronavirus lockdown, while the federal government’s regional broadband tax passed the Senate as part of a package of telecommunications reforms.

The wholesale provider reported a 38 per cent rise in revenue for the nine months to March 31.

Presenting its third-quarter results on Thursday, NBN Co said revenue for the nine months was $2.8 billion, a substantial jump on the previous corresponding period.

Demand for NBN services from home-based workers helped, with many workers asked to work from home from March to curb the spread of the coronavirus, boosting demand for high-speed internet.

NBN Co chief executive Stephen Rue said there was no doubt COVID-19 had accelerated demand for data, with the average revenue from a residential user edging up to $45 per month, up from $44 last year.

Most customers, 68 per cent, are on plans of 50 Megabits per second (Mbps) and above.

Mr Rue said he expects NBN Co to easily achieve its full-year revenue target of $3.7 billion by June 30.

The government-owned business recently raised $6.1 billion from the private debt market.

Regional broadband tax passes

The NBN will be further bolstered by the passage of the federal government’s regional broadband tax on Thursday.

The tax on retail providers of $7.10 per month per non-NBN fixed-line broadband user will come into effect on July 1, and is designed to help subsidise the cost of maintaining the NBN’s regional infrastructure.

The funds will be used to prop up NBN Co’s loss-making fixed wireless and satellite networks in regional and remote Australia.

“Once operational, the Regional Broadband Scheme will require both NBN Co and operators of comparable fixed-line networks to contribute to funding for essential regional broadband services on NBN Co’s fixed wireless and satellite networks,” Communications Minister Paul Fletcher said.

“In turn, regional Australians can have confidence that their essential broadband services will be available into the future.”

The tax passed as part of a telecommunications reforms package that included the requirement that all premises across Australia must have access to broadband services from a ‘statutory infrastructure provider’ – the NBN or a comparable broadband network.

The baseline peak speed to be supplied is 25Mbps download and 5Mbps upload.

“These reforms are significant progress towards implementing the government’s new Universal Service Guarantee (USG), which will provide homes and businesses across Australia access to a broadband service with a peak speed of at least 25Mbps regardless of where they are located,” Mr Fletcher said.

Labor’s shadow minister for communications Michelle Rowland said the party “welcomes legislating a right to broadband, as this builds on the vision for universal access Labor put in place a decade ago”.

“It is however disappointing the government is implementing a $7 per month tax on some metropolitan and regional broadband users, while reducing investment on the NBN fixed wireless network at the same time,” Ms Rowland said.

“The reality is the revenue raised by this new tax is one-20th of the regional funding mechanism that Labor put in place a decade ago”.

The Australian Communications Consumer Action Network said the regional broadband tax would “ensure that there are long-term sustainable funding arrangements in place to provide broadband services to Australians in regional and remote areas”.

“This is important as people living in the bush often rely on the NBN Sky Muster satellite and fixed wireless services to call emergency services, run their businesses and teach their kids,” ACCAN chief executive Teresa Corbin said.

“These vital services need to be partially cross-subsidised to keep regional, rural and remote Australians connected.”

with AAP