Mr Rue said the most recent delay to reaching break-even was due largely to the timing of payments, and the business would reach positive cash flow on a “monthly basis” towards the end of the 2022 financial year.
“You’re just seeing a small shift in timing of the payments,” he said.
Looking at the now three-year old corporate forecast, he said the predictions were fundamentally the same, and the plan was best not viewed in terms of “line items” but “holistically”.
“The completion date, financial forecasts really remain the same between plans,” he said.
Mr Rue said the network was on track to complete its rollout by June 30, 2020 and to return 3.2 per cent to the government on its $29.5 billion investment in the future.
One factor that has not changed in the plan is the expected take-up of NBN connections by households and businesses, which was kept at a rate of 73 to 75 per cent. But the network has stopped reporting average revenue per user as one number covering both businesses and households – known as a “blended” figure.
The NBN Co claims this is a better representation of where the revenue is coming from. Yet while it broadened its focus earlier than some telcos expected to the higher revenue-generating business sector, the change has made comparisons to previous plans more complex.
A permanent change of 1 per cent to the take-up rate could affect the annual cash flow by $80 million, the most recent corporate plan outlines, while an average revenue per user shift of $1 would have a $100 million impact.
In the 2019 financial year, the NBN Co posted $2.8 billion in revenue and a residential average revenue per user increase of $1 to $44.
The corporate plan indicates that if the revenue continues to grow as forecast, beyond $5 billion a year, it would “underwrite … future investments” into the network. This could include upgrades to improve speeds on slower connections.
Mr Rue remained unconcerned about the looming competition from high-speed mobile and fixed networks on 5G, which some commentators believe could result in fewer people opting for the NBN. Any impact on how many people connect to the network would affect the NBN Co’s overall revenues.
“We still have a view that 5G and fixed wireless service will live together and if anything the needs of the fixed line network will be greater in years to come,” he said.
‘Major turning point’
Communications Minister Paul Fletcher, who spoke to The Sydney Morning Herald and The Age before the Corporate Plan became available for review, described it as a “major turning point for the NBN”, with almost 10 million homes ready to connect.
“The corporate plan shows that the roll-out of the network will complete next year,” Mr Fletcher said.
“That turnaround reflects disciplined execution … and this corporate plan for the period through to 2023 shows that disciplined execution continuing,” he said.
“What it also shows is we can now turn the focus increasingly from the mechanics of the roll-out to how we can best leverage [it] for social and economic impact.”
Labor’s communications spokeswoman Michelle Rowland said in a statement the new plan showed the “challenges facing the economics of the NBN”.
“Build and operating costs out to mid-2022 are $1.3 billion higher than previously forecast, and cash flows have been delayed,” she said.
Jennifer Duke is a media and telecommunications journalist for The Sydney Morning Herald and The Age.