Fibre - the only path forwards?
Quote:
Originally Posted by
Snoopy
From the above reference....
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What is UFB?
Ultra Fast Broadband fibre provides a reliable, consistent experience even at the busiest time of day.
It delivers speeds in excess of 25 Megabits per second (Mbps), using optical fibre technology rather than the slower copper technology (ADSL or VDSL).
Not only does this make your online experience faster, it allows multiple people in your household or business to be online at the same time. You will experience faster download and upload speeds, more reliable connectivity, the speeds will be consistent and you won’t have to deal with buffering.
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This is a pretty good sales pitch for Fibre Broadband. But have a look at pages 19 and 20 in the FY2019 NBN Annual Report
https://www.nbnco.com.au/content/dam...eport_2019.pdf
I was particularly interested to read about 'G-fast' which is the latest evolution of VDSL technology.
"G.fast provides greater bandwidth and improved noise mitigation on the copper pair network, and is able to achieve speeds up to 1Gbps over the shorter copper distances in typical FTTC deployments. As G.fast can be deployed on existing copper networks, it is a viable alternative where fibre into the premises is too costly or difficult to deploy."
Yes you did read that right. 1Gbps over copper! 1 Gigabit is 1000 Megabits. So we are talking about a transfer speed forty times higher than the crown fibre broadband minimum performance target! Of course fibre can do 1Gbps as well, if appropriately set up. But I had been under the impression that copper was 'down and out' as data transmission conduit of the future, when this is not so - for the last little bit of delivery to the household anyway. While still experimental, the next generation of G-fast is even more impressive with speeds of 5Gbps over a line length of 70m. Perhaps copper isn't dead yet?
Next we learn more about potential upgrades to HFC (Hybrid Fibre Co-axial; the co-axial bit being copper). This is the network owned by Vodaphone that services customers in Wellington, Kapiti and Christchurch. Vodaphone inherited this network, installed lines which date back some 20 years, when it was acquired from TelstraCkear in 2012.
"Emerging HFC technologies like Full Duplex DOCSIS 3.1®, Extended Spectrum DOCSIS (ESD), and the recently announced DOCSIS 4.0® which may offer upgrade paths capable of delivering low latency services and 10Gbps download speeds (and beyond) into the future."
Reading Crown Infrastructure information here in NZ leaves the impression that HFC technology is a dead end. Yet here we are talking about download speeds over four hundred times faster than 'basic fibre'! Is this or is this not serious competition for 'fibre broadband' in Wellington, Kapiti and Christchurch?
SNOOPY
NBN BT2/ Increasing Earnings per Share (One Setback Allowed) [perspective FY2020]
The next three posts are going to read like a horror story, but here goes.
Earnings Per Share = Normalised Net Profit After Tax / No. of Shares on Issue at EOFY
FY2016: -$2,750m / 20,275m = -13.6cps
FY2017: -$4,224m / 27,465m = -15.4cps
FY2018: -$4,779m / 29,500m = -16.2cps
FY2019: -$4,878m / 29,500m = -16.5cps
FY2020: (-$5,237m + $80m + $150m)/ 29,500m = -17.0cps
Notes
1/ For FY2020 I have added back $80m of credits to internet retailers FY20 as NBN moved quickly to offer pricing relief for increased network capacity requirements attributed to bush fires and Covid-19. I have also added back financial assistance packages for $150 million, created in consultation with industry to help internet providers connect low income households with home schooling needs, support emergency and essential services, and assist small and medium businesses and residential customers facing financial hardship.
Discussion
Despite more capital being put into the company, and more capital continuing to be invested, the loss per share keeps increasing. The trend could not be worse.
Conclusion : Fail Test
SNOOPY
NBN BT3/ Return On Equity > 15% for 5yrs (One Setback Allowed) [perspective FY2020]
ROE = Normalised Net Profit After Tax / Shareholder Equity at End of Financial Year
FY2016: -$2,750m / $12,023m = -22.9%
FY2017: -$4,224m / $14,959m = - 28.2%
FY2018: -$4,779m / $12,212m = -39.1%
FY2019: -$4,878m / $7,337m = -66.4%
FY2020: -$5,007m / $2,100m = -238%
Discussion
All the returns on equity are negative, which is never a good sign. This dramatically worsening statistic is the result of $27.409 billion of accumulated losses since FY2009. Government supplied equity of $29.5 billion is almost exhausted, but fortunately the building of the core of the network is now over and revenue is rising. Will the inflection point be reached, or will the government have to bail NBN out? The answer is not relevant to the question being asked here.
Conclusion : Fail Test
SNOOPY
NBN BT4/: Ability to raise Net Profit Margin > inflation [perspective 2020]
Net Profit Margin = Normalised NPAT / Revenue
FY2016: -$2,750m / $421m = -653%
FY2017: -$4,224m / $1,001m = -422%
FY2018: -$4,779m / $1,978m = -242%
FY2019: -$4,878m / $2,825m = -173%
FY2020: -$5,007m / $3,837m = -130%
Discussion
A negative profit margin is a loss, which is never a good sign. A negative margin of more than 100% means your loss is greater than all of your revenue. The technical term for this kind of loss is 'eye watering'. This has occurred for every year over the last five years. The net profit margin is improving as losses in relation to revenue reduce. But to be able to bank enough money on an ongoing basis to offset inflation, at some point a profit must be made. There is no sign of that here.
Conclusion : Fail Test
SNOOPY