BILLING FOR A VICTORY?
The NBN Co is set to announce its biggest ever financial blowout, with analysts predicting the company will lose as much as $1 billion in the next three months alone.
The company’s financial woes were laid bare yesterday, as it revealed it had made an estimated $400 million loss for the fourth quarter of last year.
Networks giant iiNet was also revealed to be in serious trouble, with the company’s shares falling 8.9 per cent in a week and its chief executive warning that the NBN is in a “death spiral”.
The collapse of the telco’s fortunes has been a cause of much speculation in recent weeks, and the latest revelation from the company came as the company announced a “sustained recovery” plan.
“The results from the first three quarters of 2017 are not a surprise,” iiNet chief executive David White said in a statement.
“They are based on our expectations of the company, and that our strategy for our network remains sound.”
We have achieved our objective of achieving 100Mbps broadband in a cost-effective manner over the next four years.
“This is a strong performance that reflects our commitment to deliver on our business goals and we are focused on continuing to drive growth in this space over the coming years.” iiNet has already announced that it will buy the Telstra network for $300 million, as part of a $US3 billion ($3.3 billion) takeover that will see the company merge with Telstra.
In a statement, iiNet said the deal would help it “continue to deliver the industry-leading quality, reliability and scale we expect to deliver to customers”.
But analysts said the company has struggled to recover from the NBN’s initial failure, and are worried about the future of the network.
“I think the fact that they have made this announcement in the middle of a recession is really worrying,” analyst Ian Binnie from Capital Economics said.
“In the long run, they probably need to look at their profitability and that will help them.”
But I think it will take a while before they can say that they are going to be profitable.
“Networks Minister Josh Frydenberg said the announcement showed the Government was “doing what it can to ensure the Government has the financial strength to deliver our long-term economic recovery”.”
Topics:internet-technology,government-and-politics,technology-and_news,industry,business-economics-and/or-finance,federal-government,business,internet-culture,internet,nsw,melbourne-3000,vic,au First posted June 09, 2020 10:58:59Contact Adam BarborusMore stories from Victoria”
The NBN is the foundation of our economy and the Government is committed to ensuring we have the infrastructure that delivers the best possible broadband for Australians.”
Topics:internet-technology,government-and-politics,technology-and_news,industry,business-economics-and/or-finance,federal-government,business,internet-culture,internet,nsw,melbourne-3000,vic,au First posted June 09, 2020 10:58:59Contact Adam BarborusMore stories from Victoria