- The reason behind overspending
- Providing internet services to more cities and states
- How much was spent?
NBN Co Limited, popularly known as NBN, significantly went over its annual spending budget even before the government backflipped the elevated cost of the national infrastructure budget.
The higher projected spending on NBN Co's financial year was initially slated to cost around $51 billion. However, the Morrison government in September 2020 added another $4.5 billion to the projection that allows the publicly owned company to expand its network to an additional 10 million households and businesses in Australia through its high-speed fibre internet connection service.
The reason behind overspending
As expected, NBN Co explains that the overshoots in their budget are mainly attributed to the spendings of the company in its expansion projects in 2020.
The move was not aligned with the initial plan to run the high-speed fire only to street based nodes, but was able to allow the company to branch out to more homes and businesses in Australia. The Australian government also believes that the extra expenditure in the 2021 NBN Co budget will boost the country's GDP by $6.4 billion a year by 2024, with more Australians working from home seeking for better internet services due to the pandemic.
Providing internet services to more cities and states
Despite the economic challenges that the Covid-19 posed to Australia and the rest of the world, NBN Co still managed to proceed with its expansion plans and was able to provide internet services to further cities and states in Australia. Late March this year, the company also announced its continuous efforts for expansion, reaching out to nearby islands in the country. On top of the expansion services, NBN Co recently announced its more affordable wholesale internet services, giving Australians access to better services at a more affordable price from the nation’s top broadband provider.
However, the government managed to do so without disclosing that NBN Co already exceeded its peak spending projections last year, 2020.
How much was spent?
Initially NBN Co predicted that it will be spending around $6.1 billion during the expansion period. However, the company spent $7.4 billion and was pushed to raise a matching level of debt to be able to cover the higher outflows of the expansion project.
NBN Co is a publicly-owned corporation of the Australian Government. It is responsible for the design, build and operation of Australia's National Broadband Network that is currently the largest and only wholesale broadband provider in the country. Its headquarters is located in Melbourne Australia, led by CEO Stephen Rue. In 2019, it had a recorded revenue of over $2.83 billion, which is expected to triple in the next three to four years.