Wednesday, 04 August 2021 10:17

Aussie Broadband 4Q FY21 trading update Featured


Over the quarter, Aussie Broadband has grown connections and revenue and expects EBITDA for the year excluding IPO costs to be at the upper end of the guidance provided on 28 May 2021 ($17 million to $20 million).

Overall broadband connections were 400,848, an increase of 27,790 or 7.4% QoQ. At the end of the quarter business broadband connections were 35,354, an increase of 3,825 or 12% QoQ, and mobile services were 22,454, an increase of 3,770 or 20% QoQ.

Aussie Broadband reported that it had increased its market share of NBN services to 4.9% at the end of the quarter, up from 4.4% the previous quarter.

Aussie Broadband reported revenue for the quarter was $100.1 million, an increase of $7.42 million or 8% QoQ.

“We’re extremely pleased with performance across all segments for the quarter,” said managing director, Phillip Britt. “Residential connections are continuing to grow despite strong competition in a high churn market, displaying the appeal for our high-quality network with award-winning customer service.

“The increasing focus on our business segment is showing good returns and growing at a high rate. We believe there is huge potential, particularly for businesses looking for the same excellent customer experience that we offer our residential customers, and the ability to have more control over their network using the Carbon portal.

“The fourth quarter also saw significant work to launch our first white label customer in early FY22, and we also launched mobile services under our new agreement with Optus. All these segments provide avenues for further growth for the company.”

Aussie Broadband says, that competition in the residential broadband segment remained strong through the quarter, and targeted promotions were required to maintain sales volume at expected levels.

The company said, business broadband continues to grow, and more focus is being added to this area with additional sales support, business development managers and increased marketing.

Carbon & business update

The company’s automated online platform for business, Carbon, continued to deliver business service growth with $561,000 in monthly revenue billed at 4Q FY21, a 46% increase over 3Q FY21. There are now 338 Managed Services Providers activated on the platform.

At the end of the quarter, the company had a strong increase in monthly business revenue being provisioned (work in progress) which is expected to come online during 1Q FY22. Business services typically take longer to provision than residential services due to the complex nature of the products and solutions.
Additional products and solutions are being explored for Carbon which will enable business customers and partners to manage more of their needs through the platform, reducing the need for interaction with Aussie Broadband teams.

Mobile relaunch

On 5 May 2021, Aussie Broadband relaunched its mobile product through a new mobile virtual network operator (MVNO) agreement on the Optus network which includes access to the full Optus 5G network. The agreement has allowed Aussie Broadband to offer more competitive pricing and a targeted offer to existing customers, which has resulted in a 20% increase in active services over the previous quarter.

Aussie Broadband says, that the active mobile services figures below include customers on previous mobile products and the new mobile products. Over the next few months, migrations for existing customers will occur onto the new network, with approximately 3,000 customers already transferring across. Due to the change of wholesale network, it is expected that some services will not be retained during the transfer, but that these will be offset by new service activations through a more competitive offering.

Aussie fibre project update

Aussie said that rollout of the company’s optic fibre network to 78 NBN POIs and over 20 data centres continued throughout the quarter. Twenty-five sites have now been completed. The overall project remains on budget.

Aussie commented that the lockdown in New South Wales and recent restrictions on construction activity have impacted the delivery of further local sites during July 2021. Due to other ongoing construction challenges in the NSW area, the company missed its expected completion target of 28-31 sites by 3-6 sites but will make this up during 1Q FY22.

In addition, 10 connections to customer premises have been constructed and completed, and a further 30 are under construction.

Aussie said that work in progress across four states including Queensland, South Australia, Western Australia and Victoria has increased significantly and the company expects to see an increase in NBN POI and data centre site connections during 1Q FY22.


CVC overage for the quarter remained lower than expected due to the effective capacity management using CVC-Bot, the company’s in-house developed automation software. CVC-Bot monitors over 280 CVCs within the network and upgrades or downgrades capacity as customer demand changes. CVC overage expense for the quarter was $1.35m. Increases in customer utilisation can lead to increases in CVC overage charges.


The company said it achieved a record broadband sales month in July 21 off the back of updated marketing campaigns, new promotional offers and a small number of white label sales late in the month.

Aussie Broadband says, CVC overage during July increased due to lockdowns in New South Wales, Victoria and South Australia. It is expected that New South Wales will remain in lockdown throughout August and as a result the company will continue to see increased CVC overage in this market. Customer utilisation in some areas peaked 24.5% higher in July than the month prior when they were not in lockdown.

It said, on 29 July 2021 NBN announced a CVC rebate to partly offset increased overage charges incurred during the July lockdowns. As a result of the rebate, we expect July’s CVC overage expense to be over budget, but not materially.

Editor comments

Aussie Broadband continues to grow, as evidenced by YoY growth of 50% in residential broadband connections, 92% YoY growth in business broadband connections and 102% in mobile connections, albeit from a low base. It isn't buying market share, as evidenced by the healthy forecast FY21 EDITDA, but providing value and exceptional customer service in attracting and retaining customers.

Its use of the CVC-BoT to effectively manage the trade-off between excessive CVC overage charges and customer experience, high-lights the local innovation that Aussie Broadband is implementing to manage the overly complex NBN products.

Aussie Broadband's focus on customer service and experience along with the flexibility to quickly implement new products and services from NBN ahead of others in the market is paying off for the telecommunications company.

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Chris Coughlan

A versatile technology executive with extensive experience in most disciplines and technologies in the Information and Communications Technologies sector. Roles have encompassed general management, product management, business development, sales management, industry marketing, operations management, research and development, business case development, market research and forecasting, regulatory, strategy management, solution development, major project construction, process design and management, technology and management consulting, and engineering.

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