NBN FY24 results - enterprise growth pressures industry

NBN Co's aggressive enterprise expansion depresses industry ARPUs while residential market share continues to decline.

David Kennedy · Venture Insights16 August 2024Period: FY244 min read

$5.5 billion↑

NBN Co Total Revenue (FY24)

$3.93 billion↑

NBN Co EBITDA (FY24)

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Abstract

NBN Co achieved its FY24 guidance for both revenue and EBITDA, principally due to growth in its enterprise fibre business. Slow decline in its residential connections was not enough to prevent revenue growth of 4%. Its network upgrade program is steadily progressing, with 78% of the fixed line network now with access to Ultrafast wholesale services. The implications for NBN’s RSP customers are negative, as aggression in the enterprise market has depressed business service ARPUs across the industry.

Key Takeaways

NBN Co met FY24 guidance with $5.5 billion in revenue and $3.93 billion in EBITDA, supported by a 5% reduction in operating costs.
Enterprise revenue grew by 7.4% in FY24, acting as the primary engine for growth and offsetting a 0.2% decline in residential revenue.
The company lost 43,000 residential connections to fixed wireless and satellite competitors, leading to a falling share of the total residential market.

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Frequently Asked Questions

NBN Co met its FY24 guidance, delivering $5.5 billion in revenue and $3.93 billion in EBITDA. Financial stability was supported by a 5% reduction in operating costs and a 7.4% surge in enterprise revenue, which neutralized a 0.2% dip in residential earnings.

As of June 2024, 78% of the fixed line network has been upgraded to support Ultrafast wholesale services. The migration is actively converting customers, with 375,000 premises already upgraded to full fibre connections.

Enterprise revenue is the primary growth engine for the company, projected to grow at a 4% CAGR through FY28. However, NBN’s aggressive pricing strategy in this segment is actively depressing business service ARPUs for all major industry players.

While NBN Co lost 43,000 residential connections to competitors in FY24, residential revenue is forecast to grow at a 2% CAGR through FY28. This growth will be driven by higher ARPU from customers migrating to premium speed tiers rather than total connection volume.

NBN FY24 results - enterprise growth pressures industry

Abstract

Key Takeaways

Frequently Asked Questions

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