Download Weekly: Spark profit falls 78 percent

Spark's weak first half reflects recession and government spending cuts

Spark reported a drop of 78 percent in its net profit after tax for the first half of the 2025 financial year. EBITDAI was down 21 percent while revenue fell 1.9 percent to $1,939 million.

Spark Chair Justine Smyth says the company faces: "one of the longest and deepest recessionary periods in recent history".

In the announcement accompanying the half year report she says:

"We have seen no improvement in these conditions, and while there has been movement on monetary policy, this is yet to flow through to any meaningful change in consumer or business spending." 

The company says the performance of mobile, IT services and the continued decline of its legacy voice business were behind the fall which was "partially offset" by growth in mobile devices, cloud, data centres, and IoT.

Lower government spending

Lower government spending hit Spark's Enterprise and Government division hard. The company say it has been: "Impacted by spending cuts and mobile fleet reductions across government and businesses, changes in product mix and aggressive price competition in mobile.    

The company says it plans to cut costs, you can read that as further redundancies, and "significant changes" to the operating model, technology and network operations. All of which should cut operational expenditure by between $80 and $100 million this year and with greater benefits in coming years.

Most parts of the business turned in falling results, the exception was Spark's data centre operation which saw revenue increase 13.6 percent to $25 million.

However this bright spot is dwarfed by others such as the mobile business where revenue was down 3.7 percent to $491 million. Spark says this fall came as organisations cut their spending in line with falling staff numbers. Broadband revenue dropped 2.3 percent to $302 million as cash-strapped customers switched to lower cost plans.

Spark updated its guidance for the 2025 financial year with EBITDAI now expected in the $1,040 million - $1,100 million range. That's down from the earlier guidance of $1,120 million - $1,180 million. Capital expenditure is expected to stay in the range of $415-$435 million. The company expects the dividend per share to remain at 25 cents.

Will everyone cope when the 3G network closes?

Writing at the Digital Equity Coalition Aotearoa (DECA) website, Vic Maclennan asks “What happens when 3G switches off?”

She says:

”For those living, working or traveling in regions with no or limited 3G connectivity, the 3G shutdown raises serious concerns about digital access, equity and safety.”

All three mobile networks in New Zealand plan to close their 3G services this year. One NZ originally planned to close its network in August 2024. That was put back to March 2025 and the company now says it will close by December 31 this year.

Both Spark and 2degrees say they plan to close their networks later this year but have not named dates yet. 2degrees says it is working to expand 5G coverage to those areas that only have 3G.Spark says it plans to recycle its 3G spectrum to boost rural mobile services.

Eight months ago we were not ready

Last June Opensignal, a UK based mobile analytics firm, found many New Zealand users were not ready for a 3G shutdown.

An Opensignal report at the time noted that time spent on 3G networks had fallen dramatically in the prior two years, but that decline had slowed. It also noted that four percent of One NZ customers still used a 3G handset.

While that number will have fallen further, Maclennan points out many of the people who will be affected are among the most marginalised in our society. For them, a handset upgrade, even with new 4G capable phones costing as little as $80, would involve hardship.

Beyond voice calls

She says there are also problems with IoT devices and hardware used for security systems or medical alarms.

One NZ sees 10k satellite text messages a day

One New Zealand says last week its customers sent more than 10,000 messages using its direct to satellite service.

In a media statement the company said the increased number of Starlink satellites with direct to mobile capability means the time to send and receive a message has now dropped to “minutes”.

Earlier Download Weekly heard from One NZ customers having difficulties with the service. In some cases they were unable to use it at all. If you want to report on your experience, good or bad, feel free to comment at the bottom of the newsletter. Comments are open to all subscribers.

Microsoft says Spark deal is NZ’s largest cloud partnership

Microsoft and Spark have joined for what the pair say is the country’s largest-ever Microsoft public cloud partnership. The deal will include the largest Microsoft 365 Copilot deployments in New Zealand. It means around half the company’s staff will have the AI tool at their fingertips.

In a related story: Australia’s Department of the Treasury had a mixed experience with Copilot.

Sky Sport hikes price by almost 40 percent in three years

Sky Sport Now, the company’s streaming service, has increased the price of its monthly and annual subscriptions. From March 21 the monthly fee rises 10 percent from $50 to $55.

This follows a similar price rise in 2024 for $45 to $50. In 2023 the price went from $40 to $45. That is a rise of 37.5 percent in three years. The rise is considerably higher than the rate of consumer inflation which climbed roughly 15.5 percent over the same period.

Sky claims the increase will help maintain its extensive sports coverage, which includes rugby, motorsport and netball.

This is not the whole story. Three years ago when Sky Sport Now was considerably cheaper, football fans could watch the English Premier League, the English domestic league cup and the European UEFA tournaments. These now require considerably additional payments. To watch the same amount of football this year costs almost double the 2023 cost.

Apple iPhone 16e

Apple took the wraps of the anticipated iPhone 16e early on Thursday. The $1200 handset replaces the iPhone SE and 14 series in the company’s line up.

It’s has a 6.1 inch screen, which is considerably larger than the iPhone SE’s 4.7 inch screen. Inside is an A18 chip which supports Apple Intelligence, the company’s AI brand.

From a mobile network point of view the most interesting change is this is the first iPhone to sport the company’s in-house developed C1 cellular modem. It also supports Apple’s emergency satellite calling.

One NZ hires Greg Patchell to run Defend business unit

Greg Patchell is the new CEO of Defend, One New Zealand’s arms-length cybersecurity business. Patchell comes to the company from the Ministry of Business, Innovation and Employment where he was deputy chief executive of Digital, Data and Insights. He previously worked for Telecom NZ (now Spark) as group technology officer.

In other news...

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He writes:

Online safety campaigners say Netsafe is too close to the big tech companies and an independent regulator is required to improve online safety.

Multicloud strategy favoured by majority of ANZ enterprises
At Reseller News Lilia Guan writes about Forrester’s State of Cloud in Australia and New Zealand, 2024 report. She says:

“90 percent of enterprises are using multi-cloud strategies to enhance portability, optimise costs and mitigate vendor risks.”

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“Craigs Investment Partners’ Mark Lister had two Sky TV boxes, and neither of them worked.

He’s one of thousands of New Zealand Exchange-listed (NZX) Sky Network Television customers affected by Sky’s satellite issues.”

Launched in September last year, the government's AI chatbot for business, GovGPT, did not last long
At Interest, Juha Saarinen spotted the demise of the government’s dabble with AI chatbots. He says a message shown to site visitors suggests the pilot has fallen victim to the government’s funding cuts to official science, innovation and technology initiatives.