Broadband bundles deliver profit for Trustpower

Trustpower's latest financial result shows the company's mix of electricity, gas, broadband and consumer electronics pays off.

In the year to March 31, Trustpower saw a net after-tax profit of $129 million. That's up 38 percent on the year earlier. Total revenue for the year climbed five percent from $903 million to $947 million.

Revenue from telecommunications services jumped 23 percent from $65.9 million to $80.6 million. The company is now New Zealand's fourth largest broadband provider behind Spark, Vodafone and the Vocus Group.

Two-thirds of Trustpower customers take more than one service

From Trustpower's strategic point of view, the important news is that two-thirds of the company's customers now take two or more utility services on the same account. Five years ago Trustpower CEO Vince Hawksworth outlined a plan to become a multi-utility business. The bundles can include electricity, gas or broadband.

More than 100,000 customers buy a Trustpower bundle. During the year Trustpower saw more than 3,000 existing customers add broadband to their 'bundle'. Trustpower says at the end of the financial year it has 87,000 telecommunications customers, a rise of 14 percent on the year. Last week the number stood at 90,000. The company expects to have between 95,000 and 105,000 by the end of this financial year.

Trustpower's multi-utility strategy has paid off. In the latest report the company saw gross margins increase by a much faster rate than most utilities experience. For Trustpower bundling is more profitable than selling a single service. One reason for this is that bundling means lower than usual levels of customer churn. The company also says it gets benefits from scale and being able to reduce billing costs when customers buy more than one service.

Chorus sees data traffic double in two years

In April the average New Zealand household used 204GB of data. This is more than double the figure in April 2016. In 2011 the figure was just 13GB. From July 2016: Chorus says 100GB a month is the new normal.

Chorus network strategy manager Kurt Rodgers says there is no sign of demand slowing. He says: “Our view is that ever-increasing data demands and the evolution of new data-hungry devices and applications, such as 4K televisions and virtual reality, will only continue to fuel the demand for bandwidth."

Rodgers expects the average monthly data use to hit 680GB per household by 2020.

He says Chorus knew April would be a big month with the Commonwealth Games coverage being streamed by TVNZ and the school holidays. He says he expects records to be set when Spark streams next year's Rugby World Cup.

Vodafone picks up remaining Farmside shares

Almost a year after buying 70 percent of rural broadband provider Farmside, Vodafone has exercised its right to acquire the remainder from TeamTalk. Vodafone paid $10 million for the 70 percent stake and just $3 million for the remaining 30 percent.

Vodafone plans to continue running Farmside as a standalone business. CEO Russell Stanners says no major changes are planned. Farmside staff and operations will remain in Timaru, while the services Farmside currently offers to rural customers will continue.

TeamTalk CEO Andrew Miller says the transaction means the Wellington-based telco can focus on its priorities. He says these are: "Rolling out our national digital tier III network and under-grounding our fibre network in Wellington’s CBD.”

Kordia to upgrade Taitokerau Auckland-Whangarei fibre

Kordia will add carrier-grade dense wavelength division multiplexing (DWDM) on the Taitokerau Fibre Networks backhaul link between Auckland and Whangarei. The new equipment can deliver 4 Tbps, that's almost 50 times current capacity on the connection. Kordia says this will add Whangarei to its DWDM network linking to other North Island cities.

Taitokerau Fibre Networks is 80 percent owned by three Te Taitikerau Iwi. Southpark Utilities Limited owns the remaining 20 percent. Southpark Utilities is an Auckland-based gas operator and subsidiary of a property development company.

Cert gets budget boost

The year-old Computer Emergency Response Team got a $3.9 million of extra funds in this week's annual budget. The government earmarked the money to improve national online security capabilities. Communications minister Clare Curran says the funding means Cert can continue to respond to major security events and provide advice to business, organisations and individuals. She says: “We’re dealing with threats such as disruptive malware, denial‐of‐ service attacks and theft of data perpetrated by a range of actors, including organised criminal groups and vigilante hackers.”

Elsewhere in the budget was $6.2 million set aside for the Ministry of Business, Innovation and Employment to continue providing policy advice on communications issues, such as 5G mobile networks and ultra‐fast broadband.

NZ Herald reports Spark to bid for English Premier League rights

An unsourced report in the New Zealand Herald says: "The Herald understands Spark is close to securing the rights to the English Premier League football, from the start of the 2019-2020 season, for three years." If so, the telco would add these rights to those for the Rugby World Cup 2019. Spark was previously involved in the EPL rights through a partnership with Coliseum Sports which held them from 2013 to 2016.

Spark plans cloud phone service

Spark is to launch a cloud phone service to small and medium business customers. It will use Cisco-owned Broadsoft’s Broadcloud technology. The planned cloud phone service will offer a unified communications suite that puts instant messaging, voice, mobile and 'presence' — letting people know where someone is — in a single package. There is also support for video conferencing, desktop sharing and virtual meeting rooms.

New boss for Vodafone Group

Vodafone Group CEO Vittorio Colao will be replaced by Nick Read from October. Read is currently the companies chief financial officer. Colao has been in the job for ten years and oversaw Vodafone's transition from a mobile carrier to a broader business with a wide portfolio of communications and enterprise technology products and services. During his time the number of customers doubled.