There were some very interesting revenue figures released as part of NBN Co’s Annual Report 2012 last Friday.
| NBN Co Pulled In AU$2M In 2011-2012 |
“NBN Co has reported revenues of AU$2 million for the first year of commercial operations for the 13,536 premises connected to the National Broadband Network (NBN), ending June 30, 2012.”
The NBN when completed is designed to cover approximately 12 million premises. If NBN Co can deliver $2 million in revenues over 13,356 premises, lets do some simple maths with the currently factual numbers.
Presuming a 75% uptake of NBN services across the twelve million premise footprint – (ie: nine million premises take up a service) – if 13,356 premises deliver $149.74 each – (to total two million dollars in 2012) – then nine million premises – (at the same rate) – would deliver a revenue flow of $1.34 billion.
Furthermore, it is likely that the annual per-premise revenue will be higher than $149.74, because many – (in actual fact, most) – of those 13,356 premises would not have been connected to the NBN for the entire 12 months covered by the annual report.
Given that the base wholesale NBN pricing is $24.00 per month, theoretically, the minimum annual per-premise revenue should be 12 times that figure, or $288.00 – which is more than double the figure in the annual report.
Nine million premises, at $288.00 per premise gives a revenue flow of $2.52 billion.
Not bad for a “white elephant” that will never pay for itself! It should also be pointed out that NBN Co didn’t start charging ISPs until October 2011.
I also suspect a lot of people will say something like “75% uptake? They’re not even close to that!”.
Sure. That is true – right now.
But as Telstra gradually decommission the copper network within the NBN fibre footprint, people on the existing copper network – (even if it is just for a telephone service only) – will necessarily need to be transferred to the NBN by their service provider to continue that service.
Given also that it is possible to have more than one service per premise, it is technically possible for take up to go beyond 100 percent.
So 75% might actually be a very cautious estimate.
It is making money, and based on these current revenues, a completed NBN should be making a lot of money for a long, long time.