Download Weekly: Spark sells majority stake in data centre arm
In this newsletter:
- Spark sells 75 percent of data centre business
- Motorola releases range of satellite ready handsets
- RCG wins social impact award
- One NZ climate goals get international backing
Pacific Equity Partners takes majority data centre stake
Australian private equity firm Pacific Equity Partners (PEP) has purchased 75 percent of Spark’s data centre business.
The transaction is made up of $486 million in cash and an additional $98 million if the business meets performance targets by the end of 2027. Spark says it will use the money to pay down debt. The deal values Spark’s data centre business at around $700 million.
Spark CEO, Jolie Hodson, says, “Through this partnership we will realise value for our data centre assets in the short term, while also continuing to participate in the growing market through our 25% retained stake – creating further value for our shareholders over the long term.”
Standalone data centre business
Hodson says Spark’s data centre assets and operations will be moved into a new standalone business. Its working title is DC Co. The new firm will have its own board, management team and finance.
Private equity firms like PEP rarely hold on to assets long-term. Which suggests it could prepare the business for a future trade sale.
For now, DC Co has 11 data centre sites across New Zealand and 23MW of capacity. There are advanced plans for a new development at Dairy Flat on Auckland’s North Shore and extensions at the company’s Takanini site in South Auckland.
New Zealand data centre projects
On paper there is a wave of investment in new data centres in New Zealand although some projects appear stalled.
AWS formerly promised it would open a major data centre in 2024. It has yet to deliver and there are reports work at the site has halted. Meanwhile DataGrid’s planned $2 billion investment in a Southland site along with a new submarine cable is still waiting for its resource consent.
For Spark, the deal is an opportunity to reduce the company’s $2.7 billion debt.Traditional telcos like Spark have struggled to remain profitable in the last two decades. Digital services mean the lucrative parts of the business are hollowed out as customers switch to cheaper alternatives. Meanwhile, regulatory and government pressure to make telecommunications more competitive mean lower margins in mobile and broadband.
When Spark first announced it was looking for a data centre partner in February, Spark chair Justine Smyth warned: “The scale and pace of deterioration in trading conditions we have experienced over the last year has been substantial”.
Motorola introduces mobiles with One NZ satellite support
One NZ has begun selling four new Motorola mobile phones. All models are 4G and 5G compatible and can work with One’s direct to mobile satellite service.
The top of the line motorola razr 60 is a $1400 flip phone. Also new this week are Motorola’s $800 edge 60 fusion and the $1300 edge 60 pro. The company bills it $430 moto g56 5G as a “no fuss, durable phone”. Also on sale at One NZ is the $226 moto g05.
In 2016 the Motorola brand was picked up by Chinese computer maker Lenovo. Until last year the brand has been invisible in New Zealand although it was once a popular brand with models such as the moto x.
One of the features that stands out is the phone’s te reo Māori functionality and a fully localised te reo user interface.
In other news...
- Vital presses remaining shareholders to back Tait Communications takeover — BusinessDesk (behind paywall)
- Finish line in sight for $770M rural connectivity programme — Reseller News
- Fifa World Cup rights could help TVNZ achieve pay-TV goal — The Post
- Australian court rules Apple and Google app stores are uncompetitive — Australian Financial Review
- The end of the line for AOL’s dial-up internet service — The Guardian
RCG wins infrastructure social impact award
The Rural Connectivity Group won Infrastructure New Zealand’s 2025 Social Impact Award. The network-builder earned the award for its work bridging the urban-rural digital divide.
Set up by Vodafone (now One NZ), Spark and 2degrees as a joint venture, the RCG has built 563 new mobile towers in rural areas and along regional highways. Its work even extends to the Chatham Islands.
The RCG has connected 33,000 homes to modern communications technologies including broadband. In many cases users have a choice of service provider.
One NZ climate targets gain global validation
Science Based Targets initiative (SBTi) has verified One NZ’s greenhouse gas reduction targets. The SBTi confirms the company’s approach aligns with the 1.5°C warming pathway under the Paris Agreement.
One is the first New Zealand telco to commit to absolute near-term cuts for Scope 3 emissions.
The company says it cut combined Scope 1, 2 and selected Scope 3 emissions by 64 percent in the 2025 financial year. This include a 94 percent drop in electricity-related emissions after switching to renewable electricity. It says AI-powered network optimisation saved 16 gigawatt hours of electricity.
One NZ’s targets include cutting Scope 1 and 2 emissions by 42% percent and Scope 3 emissions by 42 percent by 2030. It aims to moving to 100 percent renewable electricity use over the same period.
Five years ago: N4L checks school networks before exams
New Zealand’s NCEA exams moved online as a response to the Covid-19 pandemic and Network for Learning offered to help schools check their internet connections were up to the task.
Auckland was in lockdown which meant another data traffic peak on the Chorus network.
One year ago: ComCom report charts Starlink impact
The Commerce Commission’s 2024 Monitoring Report focused on the profound impact SpaceX’s Starlink satellite broadband network had on rural communications.
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