Question 1

How far behind is the national broadband rollout schedule?

Accepted Answer

The rollout is forecast to reach only 72% of households by 2020, missing the universal coverage target by two to three years. As of FY15, only 11% of premises had been passed, leaving a significant portion of the infrastructure build for the final five-year window.

Question 2

What is the revenue outlook for the network operator through 2020?

Accepted Answer

Revenues are projected to grow at a 65% CAGR to reach A$2.0b by 2020, driven almost entirely by subscriber volume. However, ARPU will remain stagnant at approximately A$41 as wholesale pricing must be adjusted downward to protect retail margins.

Question 3

Are customers actually upgrading to higher speed tiers?

Accepted Answer

Consumer appetite for premium speeds remains low, with 77% of early adopters selecting base tiers of 12/1 or 25/5 Mbps. This resistance to fiber price premiums suggests that high-speed tiers are currently failing to capture mass-market interest.

Question 4

Is the current wholesale pricing model sustainable for service providers?

Accepted Answer

The usage-based CVC pricing model is structurally challenged by a massive disconnect between traffic and revenue growth. While internet traffic grows at a 40% CAGR, retail broadband revenues are only increasing at 4.5%, making current wholesale costs unsustainable for retail service providers.

NBN – first million homes passed but a long way to go…

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