Telstra responds to NBN Co downgrade - Mobile World Live

Telstra responds to NBN Co downgrade

02 SEP 2019

Australian mobile operator Telstra reduced its revenue guidance for fiscal 2020 by AUD400 million ($269 million) after the country’s National Broadband Network (NBN Co) pushed back its target for being cash positive by a year and cut its revenue forecast for fiscal 2020 and 2021.

Telstra expects total revenue of AUD25.3 billion to AUD27.3 billion in fiscal 2020 (the year to end-June 2020) due to a AUD300 million reduction in payments from NBN Co, now predicted to drop to between AUD1.3 billion and AUD1.7 billion.

In a statement, the operator said it “no longer anticipates FY2020 being the year of peak NBN headwind and now estimates this will occur in FY2021”.

NBN Co, which released its 2020 to 2023 corporate plan on 30 August, said as a result of higher than expected capex in 2022, it won’t be cash positive until 2023. The company cut its revenue target for fiscal 2020 by AUD200 million to AUD3.7 billion and by AUD300 million for fiscal 2021, to AUD5.2 billion.

Revised target
In a stock market filing, Telstra said its fiscal 2020 guidance provided on 15 August was based on NBN Co’s 2019 corporate plan, and assumed its rollout and migration in fiscal 2020 would be broadly in accordance with that strategy. Telstra stated it amended its guidance after NBN Co provided an outlook for fiscal 2020 which reduced expectations on the total number of premises to be connected from 2 million to 1.5 million.

Telstra also lowered its fiscal 2020 cost reduction target from AUD660 million to AUD630 million.

The operator’s fiscal 2019 net profit declined 40 per cent year-on-year to AUD2.15 billion, as costs related to NBN Co offset gains in mobile. Its revenue slipped 2.3 per cent to AUD25.3 billion. Telstra stated it took an AUD600 million hit on its EBITDA related to NBN Co, estimating the national network had adversely impacted the metric by AUD1.7 billion since fiscal 2016.

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Joseph Waring

Joseph Waring joins Mobile World Live as the Asia editor for its new Asia channel. Before joining the GSMA, Joseph was group editor for Telecom Asia for more than ten years. In addition to writing features, news and blogs, he...

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