NBN Co's losses widened to $1.6 billion in the second half of 2016, from a $1 billion loss in the same period in 2015.
However, revenue increased to $403 million, up from $164 million, as more households were connected to the national broadband network. It expects to report full-year revenue of $900 million and to have 2.3 million premises connected by July.
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NBN Co does not expect to be profitable for several years as it spends money building a broadband network that will eventually reach 100 per cent of the population.
NBN hopes to be earning $5 billion annually by the time it finishes the network rollout in 2020.
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The average annual revenue from each connection is currently $516, or about $43 a month. At this level, NBN Co will only achieve revenue of $5 billion if it connects at least 9.6 million premises. However, it is predicting only 8 million connections by 2020.
Chief executive Bill Morrow said the additional income would come as Australians increased their speeds and downloads in coming years. NBN Co had also designed products specifically for businesses, which it had not yet marketed aggressively, he said.
"It has been another impressive result for the NBN team and our partners as we step closer to completing the build and connecting 8 million homes by 2020," he said on Thursday.
"This result gives further confidence in NBN's ability to deliver, and we remain on track to achieve our full-year 2017 targets ... With a robust balance sheet clearly being built, NBN is on track to invest in future upgrade paths as demand requires."
The median download on NBN connections is currently 67 gigabytes a month, with an average of 151 gigabytes a month.
For the first time in December more than half of all customers were on the second-highest speed of 25 megabits per second [Mbps] download, and the proportion of people on the slowest speed, 12 Mbps, decreased from 33 per cent in December 2015 to 31 per cent in a year later.
NBN Co has been encouraging retailers to market the higher speeds, which increases its revenues.
So far, 3.8 million premises have been passed by the network, but only 1.6 million have activated their connections.
NBN was connecting 48,000 premises a week and activating 20,000 connections a week, Mr Morrow said at a media briefing on Thursday.
The $1.6 billion loss includes $549 million of "subscriber costs", which is money NBN pays Telstra and Optus for every customer it takes from their telephone infrastructure. Without these subscriber costs, which are one-off payments, the loss was $1 billion.
To date NBN Co has spent $22 billion on its network. Its operating expenses are running at about $1.4 billion every six months, which includes the cost of employing 5444 people and running the network. This also includes $187 million paid to Telstra to lease its infrastructure.
The company spent $36 million, a $20 million increase, on public information and communication costs. This includes advertising and research costs.