NBN reaches long-awaited revenue target — but inflation changes the story

Fifteen years on, the NBN has hit its legacy revenue target, but inflation and fiber economics have changed what that milestone actually means, writes Paul Budde.

IN AN INTERVIEW PUBLISHED BY Communication Day, NBN Company CEO Ellie Sweeney It noted that residential average revenue per user (ARPU) had reached $52, finally exceeding the long-standing $51 benchmark that NBN leadership saw as essential for the sustainable operation of the network.

After more than a decade, this is a symbolic turning point. The $51 figure dates back to the original NBN planning period and was later reconfirmed under subsequent leadership. But although this figure has now been reached, the economic assumptions behind it require closer examination.

What does $51 mean in today’s dollars?

The $51 ARPU target was formulated around 2010. When adjusted for inflation, this equates to roughly $75 per month in today’s terms. From this perspective, the current ARPU of $52 represents real progress, but it also shows that the NBN remains well below the level of revenue originally projected to be financially sustainable in real economic terms.

This is not a failure. It is a reminder that nominal targets lose their meaning when separated from the economic context in which they are placed. Coming up with a headline-grabbing number 15 years later is not the same as achieving your original goal.

Fiber delivers long-awaited efficiency

Communication Day The interview outlines clear operational improvements: reduced truck turnover, lower failure rates, reduced operating expenses, increased earnings before interest, taxes, depreciation and amortization (EBITDA) and improving free cash flow before financing. These gains are closely tied to the steady replacement of legacy copper infrastructure with fiber.

This trend should not come as a surprise. The early years of the NBN, including when I was a strategic advisor to the then Minister for Broadband Stephen ConroyI have argued publicly and consistently that a predominantly fibre-based network would, over time, be more effective for the Australian economy and society. The issue was not with technological purity but with long-term efficiency, durability and total cost of ownership.

I also warned that when the NBN is later restructured from an all-fiber model to a mix of technologies, short-term savings will likely be offset by higher remediation, upgrade and operating costs. The data now emerging—fewer errors, fewer site visits, and inherently lower operating costs as fiber penetration increases—is closely aligned with earlier assessments.

This is not about restarting old political debates. This simply reflects a recurring reality of infrastructure economics: Design choices made for short-term reasons tend to reassert themselves over time.

ARPU growth: Demand and regulation

NBN Co attributes recent ARPU growth to increased uptake of higher-speed tiers under its regulatory framework and CPI-linked wholesale pricing. Both factors are important, but not the same.

The shift to faster services reflects real demand, as households and businesses become more reliant on cloud services, streaming, remote working and digital platforms. However, CPI-linked pricing is a regulatory mechanism designed to protect income in an inflationary environment.

From a policy perspective, it is reasonable to ask how much of ARPU growth reflects organic value creation and how much is due to regulated price pass-through. This distinction is especially important in a time of persistent cost of living pressure, where wholesale price increases inevitably shape retail affordability and digital inclusion.

NBN is not a profit machine, it is a national investment

It is also important to be clear about what the NBN is and is not designed to be. From the outset, I have argued that this should be understood as a national investment in Australia’s economic and social foundations, not as infrastructure expected to maximize financial returns in the traditional business sense.

This view is in line with a long tradition in utility economics and has been expressed most clearly by economists such as: michael hudsonThey argue that basic services are most efficient when provided at cost or with modest public support, rather than treated as rent-generating monopolies. When basic infrastructure is “sweatshopped for efficiency,” it increases costs across the economy, weakens competitiveness and ultimately undermines living standards.

From this perspective, broadband is not an asset to be optimized to generate revenue; It is an essential input for productivity, innovation and social participation. Its biggest return remains off the NBN’s balance sheet; lower transaction costs, broader market access, better public services and a more resilient economy.

A broader measure of success

Much of the public debate about the NBN has remained fixed on whether it can be judged as a financial success or failure using narrow accounting criteria. This framework increasingly misses the point.

As I mentioned in my previous articles about NBN, broadband infrastructure now forms the basis of almost every dimension of economic and social life. Measuring his success primarily against an income metric designed in a very different technological and economic era risks understating his true contribution.

Reaching $52 ARPU is a significant operational milestone and a sign that the NBN is finally benefiting from the structural improvements that should have occurred sooner. But this is not a conclusion.

The more relevant question now is whether Australia is aligning its regulatory, pricing and investment settings with the strategic role digital infrastructure plays in a modern economy. Considered on this basis, the economic and social benefits of a robust, future-proof national network are likely to far outweigh the financial implications of the NBN itself.

Paul Budde IA is a columnist and managing director of independent telecommunications research and consultancy. Paul Budde Consulting. You can follow Paul on Twitter @PaulBudde.

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