Telstra says peak NBN pain will now hit in FY21 instead of FY20 after the government-owned NBN Co flagged fewer than expected connections over the next year.
Telstra on Monday softened its FY20 income guidance by $400 million, to a range of $25.3 billion to $27.3 billion, after NBN Co reduced its connection forecast from two million to 1.5 million premises in its corporate plan on Friday.
Telstra has also adjusted its free cashflow after operating lease payments for FY20, dropping the amount by $100 million to a range of $3.3 billion to $3.8 billion, while the telco’s cost reduction target has been moderated from $660 million to $630 million for the coming year.
Telstra said NBN Co’s updated figures would delay peak headwinds from the National Broadband Network rollout to FY21, having previously flagged FY20 as the year it would cop the biggest hit.
The company – which gave its original guidance at its full-year results just two weeks ago – said underlying earnings excluding in-year NBN headwind are however expected to grow by up to $500 million in FY20.
Last month Telstra said earnings lost to the NBN would increase to between $800 million and $1 billion in FY20 as customers continue to migrate from its copper network.