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Chorus reorganisation to focus on changing market

Major reorganisation at Chorus, falling mobile handset sales, ditching Vodafone brand to pay off
Chorus reorganisation to focus on changing market

Chorus is planning a major reorganisation it says is necessary to deal with a changing market and new regulatory settings.

In 2020 the 2006 Telecommunications Act was amended to set a new regulatory framework for the fibre era. Those amendments came into force at the start of 2022.

The wholesale fibre company plans to reorganise around three divisions. The access division will focus Chorus’ core business: wholesale fibre broadband services for business and consumers. The infrastructure division is in charge of finding new ways to squeeze revenue from Chorus’ assets.

The fibre frontier

A third division, fibre frontier, will work to extend the fibre network further into rural and regional areas. When combined with the networks operated by NorthPower, Enable and Tuatahi First Fibre, the fibre footprint currently reaches 87 per cent of the population. Extending this a further three per cent is possible, beyond that, Chorus would need some form of government support.

Each of the new divisions will have an executive general manager who reports to Chorus chief executive JB Rousselot.

The company will establish other executive roles looking after technology, network operations, people and culture, finance, legal, regulatory, and stakeholder engagement.

Aue moves to COO

As part of the changes, the CFO, Mark Aue, who lead 2degrees before its merger with Vocus, will become the chief operating officer. In this role he will be accountable for enterprise performance, customer service and engagement. He will manage brand and marketing strategies. All this will be on top of his finance role.

Jo Mataira will move from being head of people experience to become chief people officer. Katrina Smidt who is now the deputy CFO will move onto the new executive team.

Ed Hyde, the chief customer officer and Andrew Carroll, customer network operations will not be part of the new executive but will stay at Chorus while a transition plan is put in place.

Tim Hayward updates his earlier story on the emerging satellite to mobile technologies.

Uncertainty stalls NZ handset market

New Zealand’s phone handset market dropped 4.2 per cent year-on-year in the first quarter of 2023. IDC says a total of 336,000 units shipped during the period. In comparison, Australia’s handset market dropped 7.6 per cent in the first quarter.

Economic uncertainty lies behind falling phone demand. IDC says the causes include, what was at the time, the forthcoming budget along with the general election, talk of inflation, recession and high interest rates.

IDC reports the channel is full of inventory and vendors have moved to consolidate their range of devices while introducing new models to entice customers.

Zachary Candy, lead analyst, Mobile Phones Research at IDC New Zealand says: "A shift was seen towards more premium devices in the first quarter, with large shipments of Apple’s iPhone 14 series and the recently launched Samsung Galaxy S23 series models helping to maintain a high average selling price.

Samsung back in pole position

Samsung was the top selling phone brand in the quarter regaining the lead from Apple. The Korean company enjoyed a 44.3 per cent market share in the quarter while Apple sold 36.9 per cent of handsets during the period.

IDC says the Samsung Galaxy S23 Series “performed extremely well” while the “iPhone 14 series continues to be popular”.

The only other names of note are Oppo which sits at 9.8 per cent and One New Zealand’s own-branded phones, formerly sold with a Vodafone badge.

Ditching Vodafone brand pays for One NZ

A strong performance from One New Zealand, the telco formerly known as Vodafone, helped Infratil turn in solid earnings figures for its 2023 financial year.

One NZ reported an EBITDAF (earnings before interest, tax, depreciation, amortisation, fair value movements of financial instruments, investment costs, realisations and impairments) of $527.8 million. The company’s revenue was up a fraction, 0.8 per cent, at $1.98 billion.

A research note from Nevill Gluyas, a Jarden director, describes One NZ’s EBITDA guidance range for the next financial year as “very strong”at $580 to 620 million. He says this, in part, reflects the reduction in brand payments to the UK-based Vodafone Group.

Microsoft joins renewable energy party with Contact geothermal

Weeks after Amazon’s AWS unit signed a long-term high-profile renewable energy contract, Microsoft has inked a similar deal.

A 10-year agreement with Contact Energy will give Microsoft all the renewable energy attributes generated by the new 51.4MW Te Huka Unit 3 geothermal power station.

Contact explains the weird jargon:

“Ownership of renewable energy attributes is the global standard for electricity customers to show they are using a renewable source. This is important for encouraging renewable electricity, since electricity consumed on a shared grid cannot be traced back to a specific power station”.

The power company’s CEO, Mike Fuge, says long-term commitments to purchasing renewable energy attributes is a way to bring new renewable generation online faster.

He says: “Further development at Te Huka has always been on the cards. By entering this arrangement with Microsoft, Te Huka Unit 3 got the backing it needed, providing further confidence to develop this project."

Geothermal power is an interesting choice. Contact points out that unlike other forms of renewable energy it generates a reliable amount of power that is not dependent on weather.

In other news…

Ireland’s Data Protection Commission fined Facebook parent Meta a record US$1.3 billion for violating EU data privacy rules. The Irish regulator says Facebook failed to comply with a 2020 decision by the European Union’s highest court that data shipped to the US was not sufficiently protected from American spy agencies. The Irish Times has an interesting take on the story saying despite its size, the fine is immaterial, what is important is the move signals that the EU is losing patience with Facebook.

TVNZ has a neat clip: How West Coast internet cables are shaking up earthquake research. Fibre cables are able to detect seismic rumbles that could help prepare communities ahead of the big one. Last year Fibresense showed its earthquake technology in Wellington.

At Reseller News Rob O’Neill reports that Inland Revenue could use local cloud hosting for its new $1.3 billion tax engine. It’s a big contract that should tempt potential tenderers.

Auckland Council’s Tātaki Auckland Unlimited agency is running a digital campaign to attract technology workers to the city. The campaign targets international senior tech talent, with an emphasis on roles on the Immigration NZ Green List of hard-to-fill jobs that provide a priority pathway to residency.

A report in the New York Times covers comments by the US Surgeon General who warns there is “a profound risk of harm to adolescent mental health” from social media.

The Download Weekly is supported by Chorus New Zealand.