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NBN delays to impact Telstra's revenue by $300M

NBN delays to impact Telstra's revenue by $300M

Lower than expected premises ready for services is one of the causes

Credit: Dreamstime

Telstra expects revenue for the 2019 financial year to suffer a $300 million hit following NBN Co's corporate plan announced on 31 August.

The publicly-listed telco told shareholders on 6 September that NBN Co Corporate Plan 2019 includes lower than previously estimated premises declared ready for service (RFS) and premises activated for FY19.

Consequently, this will result in a $300 million reduction in revenue, which is now expected to be between $26.2 billion to $28.1 billion.

Earnings before interest, tax, depreciation and amortisation (EBITDA) will see a $100 million reduction with the telco now expecting it to be between $8.7 billion to $9.4 billion.

"This has the effect of deferring per subscriber address amount (PSAA) receipts from NBN in FY19 into future periods," a Telstra statement read.

"This will be partly offset in FY19 by the natural hedge including benefits from lower NBN costs to connect (C2C), lower network payments to NBN and retained wholesale EBITDA.

"While the lower volumes impact Telstra’s outlook for FY19, it is anticipated these changes will be financially positive to Telstra over the full rollout due to the effects of the natural hedge."

As reported by sister publication Computerworld, NBN Co expects to make 9.7 million premises ready to connect – down from the 11.05 million forecast in the previous edition of its corporate plan.

NBN Co revenue is now projected to be of $3.9 billion for FY20, down $1 billion from its previous forecasts.

Telstra closed the 2018 financial year with net profit after tax of $3.5 billion, an 8.9 per cent lower than the previous year - EBITDA was also down for the year by 5.9 per cent to $10.1 billion.

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