Telstra has forecast a “broadly flat” outlook for sales and earnings growth for the rest of fiscal 2015, but a river of cash is headed the telco’s way over the next few years as the rollout of the Coalition’s multi-technology NBN takes off, after the definitive agreements with the government in December.

Reporting a $2.1 billion first-half net profit, up 22%, Telstra for the first time broke out the $385 million income from the NBN (slide 19) over the six months to December, up 31% from $294 million a year ago, and explained the jump was largely due to $219 million in infrastructure payments from the government, which were 60/40 attributable to the completion of the transit network (the backbone of the NBN) and a pickup in the early stages of the NBN rollout, mostly fibre-to-the-premise to date.

NBN-related payments to Telstra — which have an $11 billion net present value (in 2011 dollars) but in nominal terms could total almost $100 billion over 55 years — will ramp up from next year when the hybrid-fibre cable (HFC or coaxial cable running to homes with pay TV) upgrade, and the rollout of fibre-to-the-basement and fibre-to-the-node (FTTN), begins in earnest.

Telstra chief David Thodey told analysts yesterday morning that as the rollout of the NBN ramps up “we do get more cash, but I do want to stress that hasn’t happened yet”.

Thodey was keeping a lid on it yesterday, saying Telstra was being prudent in its own forecasts given the renegotiation of the NBN agreements with the government and the rollout had taken longer than expected.

“At the moment the schedule doesn’t look untoward, but that will start to change as they get FTTN going.”

Telstra has not released forecasts, but analysts have their own models. Morningstar’s Daniel Mueller, for example, predicts Telstra will get $600 million this year, $800 million in 2015-16, $1 billion in 2016-17 and $1.4 billion in 2017-18.

Mueller cautioned Crikey not to put too much store in the NBN forecasts, however: “There’s uncertainty in terms of the pace of the rollout, and a change of government could change the technological nature of the rollout.”

Telstra will wind up in the very nice position of getting paid to transfer nearly a million retail HFC customers over to itself, if those customers sign up for Telstra’s NBN plans. When the HFC networks were going to be turned off completely, there was a natural cut-over point — the fibre installation — when a customer might switch to a rival broadband retailer. Now, Telstra can hang on to its subscribers by getting them to re-sign an NBN deal, and then simply mail out a new modem.

Meanwhile, Telstra is ramping up its national wi-fi network, announced last May. Yesterday morning’s statement  said more than 1000 wi-fi hotspots were already enabled and Telstra was aiming to offer Australians access to 2 million wi-fi hotspots across the nation, and more than 13 million hotspots around the world.

That sounds like a lot. A small number of those are the pink-signed wi-fi hotspots owned by Telstra — some at public telephones — and available to its customers. Thodey said the hotspots “are attracting people … it’s great to see people re-congregating around our payphones again”.

The vast majority of the rest of the 2 million hotspots will be created by allowing Telstra broadband customers to access other customers’ modems enabled with Fon software — for example, when sitting at a bus stop. How Telstra’s customers are going to feel about sharing their modems with passers-by — with all the privacy and security fears that might stir up — is yet to be seen.

Thodey was supremely optimistic about the outlook for Telstra’s business, which is all about connectivity and the exciting potential of technologies — like the so-called “internet of things” as all kinds of machines, devices and cars go online. The outlook was barely affected by business or consumer confidence, Thodey said:

“In our industry, the demand is not going away, the big question is how can you price for the value in that. Overall we remain a little bit outside of the cycle of consumer confidence. Mobile phones and broadband access is not seen as discretionary … it’s seen as ‘I need it, I don’t know how to run my life without it’.”

Telstra is in a near-impregnable position in a growth industry, calling the shots. It feels like we’ve been held back — waiting for the dominant telco to finally deliver us fast broadband, on its own terms. Meanwhile, sadly, Australia languishes at 44th on the list of countries in a recent worldwide broadband survey — with download speeds averaging 6.9 megabits per second.

That situation is finally about to change, of course, but it is an open question whether the mixed-technology NBN will be enough to lift Australia up the rankings, where we want to be.