Wednesday, 10 August 2022 08:50

Affordability remains NBN Co's main problem, says Budde Featured

Paul Budde: "They have predicted year after year that ARPU would move towards $52. This is the clearest indication that we have a problem with affordability." Paul Budde: "They have predicted year after year that ARPU would move towards $52. This is the clearest indication that we have a problem with affordability." Supplied

The NBN Co continues to have a problem with the affordability of its network, independent telecommunications consultant Paul Budde says following the company's announced of its FY22 results on Tuesday.

Budde told iTWire in response to a query that the results were not in any way a surprise. The NBN Co said its revenue had risen by 10%, but it still reported losses of $1.46 billion for the year.

Budde said the key to the NBN Co's problem in becoming profitable was the fact that the average revenue per user (ARPU) had hardly moved. The figure was $45 at the end of FY21 and improved to $46 by the end of the first six months of 2021-22.

"They have predicted year after year that ARPU would move towards $52. This is the clearest indication that we have a problem with affordability," he pointed out.

"People are not prepared to spend more on broadband. This is also an indication that government intervention is needed to break through this vicious cycle.

"Like the other telcos, you need to bring costs down to stay financially viable."

Communications Minister Michelle Rowland and Finance Minister Senator Katy Gallagher said the new Labor government welcomed the results.

In a joint statement, they said the results showed that many Australians had moved to higher speeds in order to make it easier to study and work from home.

“The NBN was announced in 2009 as a key investment in the nation’s future and since then has had a profound impact on Australia’s capacity to connect with the world and with each other," Rowland said.

“It’s great to see so many Australians benefitting from their connection to the NBN, embracing higher speed services in this increasingly digital society.”

“NBN Co is working on options to address the Albanese Government’s election commitment to fix the NBN and the government will provide further updates in due course.”

Senator Gallagher said: "These strong results demonstrate NBN Co’s capacity to deliver Internet to Australian homes and businesses at a time when high-quality, reliable broadband is required more than ever, with 76% of customers on 50Mbps speed plans or higher.

“The Albanese Government will support NBN Co to continue to meet increased demand for high-speed connections and will continue to invest in the network to deliver the government’s broadband policy objectives in line with the fixing the NBN commitment.”

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Sam Varghese

Sam Varghese has been writing for iTWire since 2006, a year after the site came into existence. For nearly a decade thereafter, he wrote mostly about free and open source software, based on his own use of this genre of software. Since May 2016, he has been writing across many areas of technology. He has been a journalist for nearly 40 years in India (Indian Express and Deccan Herald), the UAE (Khaleej Times) and Australia (Daily Commercial News (now defunct) and The Age). His personal blog is titled Irregular Expression.

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