Aussie Broadband tops 500,000 customers

Aussie Broadband has turned in strong growth across the board, topping $500 million in revenue and 500,000 customer connections.

ABB’s total connections rose by 48 percent in the year to June 30 to 584,793, of which 464,979 were residential service (up 28 percent), 59,488 were business (up 68 percent), 37,996 were mobile (up 48 percent), and 60,326 were businesses (up from just 2144 at the start of the year).

The 46 percent growth in the company’s total subscribers to 584,793 propelled the company to $547 million revenue, compared to $350 million last year, with net profit of $5.3 million.

CEO and managing director Phillip Britt told ABB’s earnings call that the rollout of its own fibre, which now reaches 83 NBN points of presence (PoPs), 22 data centres and 77 buildings, delivered annual savings of $13.5 million.

Britt said the company expects its fibre network to continue growing, but on a more incremental basis.

The criteria for growth, he said, would be to identify clusters of customers within one or two kilometers of each other and within “about five kilometers” of existing ABB fibre, and work out whether there's a business case for laying fibre to them.

Weather events such as flooding in NSW and southern Queensland delayed the connection of some PoPs, but the telco believes it will have fibre to all 121 POPs by the end of the current quarter.

Further savings will be realised over the next two years as 400 ABB services and more than 1000 Over The Wire services are migrated to the company’s own fibre.

ABB highlighted software products it has developed as major factors helping it grow while keeping costs under control.

These include Carbon, which lets partners qualify, quote, order, connect, modify and troubleshoot NBN services, and has 400 partners signed up; and NetSIP, used by 250 customers to enable voice services and currently supporting “over 1 million numbers and 120 million minutes per month”.

As CFO Brian Maher pointed out, growth in the voice market is pleasing because it is a high margin segment of the business.

The company’s relatively small mobile segment added 12,290 new customers, and Britt said ABB will drive further growth in 2023 and beyond by launching a range of multi-product mobile bundles.

Britt is optimistic for 2023, saying ABB expects revenue to pass $800 million for the financial year.

The ongoing NBN special access undertaking (SAU) negotiations won’t affect retailer margins until the 2024 financial year, since it will some into effect in July 2023, Britt said.

As part of its revised offer, NBN Co said extra bandwidth charges will be axed on all plans between 2023 and 2026.

Britt said he doesn’t consider what’s currently on the table to be fixed, since there’s going to be further consultation processes and negotiations.

The other uncertainty about the SAU is how retailers respond to it. 

Britt said ABB would rather retain any bandwidth savings to grow its margins, but that would partly depend on whether other retailers do likewise, or cut their prices in line with the new tariffs.