Solid year-end results lift Spark and Chorus

Covid failed to derail telcos

A $25 million Covid-19 hit failed to derail Spark. The company met its earnings guidance for the 2020 financial year. Spark saw a 2.5 percent increase in revenue and a 4.4 percent rise in net profit. Ebitda was up 2.1 percent.

Spark says the pandemic all but wiped out mobile roaming revenue in the second half. The company's retail stores fell with many outlets closed during lockdowns. Waiving excess data fees on capped plans and not charging Spark Sport customers when there were few live events also cut revenue.

On the plus side Spark saw increased demand for mobile. Revenue was up 3.9 percent at $840 million. The company says the growth was, in part, down to uncapped mobile data plans. The number of customers on these plans tripled during the year. Spark says its mobile market share climbed one percent in the year.

Broadband flat

Broadband revenue was flat at $680 million. Intense price competition makes progress hard in this sector. Voice revenue continued its long-term decline dripping 11.3 percent to $443 million.

Looking ahead, Spark CEO Jolie Hodson warns that the company expects Covid-19 to wipe a further $75 million off the bottom line in 2020. Despite this she says there will be no let up in Spark's capital expenditure. This includes rolling out 5G mobile.

Chorus reported a one percent fall in revenue for the 2020 year, down from $970 million to $959. Ebitda was up two percent at $648 but still below the 2018 figure.

The network operator saw operating expenses and capital expenditure fall during the year. This was because the first stage of the UFB fibre roll out finished. The lockdown also saw a halt to non-essential network build and connection activity.

Net after tax profit came in at $52 million, two percent down on 2019's $53 million. During the year active fibre connections on the Chorus network climbed from 610,000 to 751,000. That's a rise almost 25 percent.

The main threat facing Chorus investors in coming years is regulatory. Soon the Commerce Commission will make a final decision on the regulatory regime that will affect the return the network company will earn on its investments.

UFB hits 1 million connections, 60 percent uptake

The Ministry of Business, Innovation and Employment's latest Broadband Quarterly Connectivity Update to June 2020 says one million New Zealand households or businesses now has a broadband connection.

This moves the uptake rate to 60 percent. There are parts of New Zealand where uptake is much higher. Whatawhata in the Waikato has 80 percent. Horotiu and Rolleston are at 77 and 76 percent while Hamilton, Waiuku and Lincoln are all at 71% uptake.

A further 25 towns have been added to the network in the last three months. There are now 194 cities and towns with UFB.

Crown Infrastructure Partners CEO Graham Mitchell says: "Households and businesses are continuing to move to the fastest UFB plans that they can. Gigabit connections are continuing to grow, with 145,785 households and businesses now on a gigabit connection. The average speed of UFB services is now 229 Mbps.”

Enable connects 120,000 to fibre in Christchurch

Christchurch fibre provider Enable says there are now 120,000 connections to it network. CEO Steve Fuller reports Enable is getting 2,000 orders a month. He says almost half the connections are at speeds of 200Mbps or higher.

Customers happier with telcos

The Telecommunications Dispute Resolution service says customer complaints dropped when New Zealand went into lockdown earlier this year. Telecommunications Forum chief executive Geoff Thorn says, in part, this was down to the extra steps telcos took to help customers during the lockdown. He says in the first six months of 2020 only 1.9 percent of complaints went to formal dispute resolution.

Tuanz switches Rural Connectivity Symposium format

Auckland's second Covid-19 lockdown has seen Tuanz change the format for this year's Rural Connectivity Symposium. A two-day mix of online and live sessions will replace the planned Hamilton event. Speakers for the online sessions include Communications Minister Kris Faafoi and Ultimate Broadband CEO Mike Smith who is also chair of the wireless internet service provider organisation Wispa.