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NBN shows strong ARPU growth as users connect

HFC trials announced ahead of 2016 launch

Fibre-to-the-home revenue on Australia's National Broadband Network (NBN) more than double between the first quarter 2015 and the quarter just completed, the company's latest results announcement shows.

nbnTM reported AU$41 million in FTTP revenue for the quarter, $25 million better than the $16 million recorded for the same period last year.

Satellite revenue remained steady at $3 million for the quarter, while fixed wireless grew from $2 million to $5 million, reflecting increased attention the company has given the wireless product since 2013.

The fibre network that's driving the increased revenue nearly doubled its number of active premises, adding 238,430 premises to the existing 266,984 to pass 500,000 users.

By those numbers, monthly Average Revenue per User (ARPU) for fibre went from just shy of $20 (Q1 2014) to more than $27 (a rise of 35 per cent)*. Across the whole network, ARPU rose from $39 in Q1 2014/2015 to $43 for Q1 2015/2016.

FTTP's ARPU growth came in spite of a slight drift in the proportion of top-tier 100 Mbps customers (from 18 per cent to 17 per cent). As more users come online, there's a shift both from the fastest and the slowest offerings: the 12/1 Mbps product went from 38 per cent to 35 per cent of users, while the 25/5 Mbps tier rose from 39 per cent of users to 43 per cent.

The strong growth in active users means that in absolute terms, all boats are floating higher, as the table below shows.

Speed Users, Q1 2015 Users, Q1 2016 Change
12 / 1 Mbps 77,033 176,895 99,862
25 / 5 Mbps 79,060 217,328 138,268
20 / 10 Mbps 2,027 5,054 3,027
50 / 20 Mbps 8,109 20,217 12,108
100 / 40 Mbps 36,489 85,920 49,431

Naturally enough, nbnTM's ongoing capex keeps the company in the red. Capex rose from $677 million for the quarter to $1,063, with FTTP rising by $48 million to $400 million and FTTN leaping by $239 million to $250 million.

The company is bullish about the future of the fibre-to-the-node product, which didn't launch in time to record any revenue for the quarter, and promised a commercial HFC (hybrid fibre-coaxial, the Pay-TV and cable broadband acquired from Telstra and Optus) in 2016.

That chunk of the network got $82 million in capex for the quarter, and the company says its first 300-user trial of HFC has started in the Queensland suburb of Redcliffe.

*Bootnote: ARPU can only be accurately estimated if month-by-month revenue is reported, since during any given period there will be a ramp-up between the start and the end of a quarter.

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