Spark profit masks underlying weakness

Mobile revenue rises, other growth remains elusive

Spark reported a full-year profit up 91 percent on last year to $499 million. Much of that is the telco reported a $278 million gain on the sale from the sale of a 75 percent share of the company’s data centre business.

The company’s adjusted net profit is $225 million, down 0.9 percent on 2025. Reported EBITDAI is up 23 percent at $1.295 billion, while adjusted EBITDAI fell 2.4 percent to $1.035 billion when adjusted for the one-offs.

Adjusted revenue is flat at $3.7 billion. Mobile revenue increased 4.4 percent to $1.52 billion and mobile service revenue was up 1.1 percent at $998 million.

The headline numbers look better than the performance of the underlying business. Spark’s underlying earnings measure actually went backwards with adjusted EBITDAI falling 2.4 percent and adjusted NPAT down 0.9 percent. Adjusted revenue remains flat.

Mobile is focus

Yet the improvement in Spark’s mobile performance and the company’s wider productivity suggest that the SPK-30 turnaround programme is already having an effect.

SPK-30, in effect, will return the company to its telecommunications roots. It aims to grow mobile, reduce exposure to legacy products and simplify the business portfolio.

Spark says the first year of the programme delivered on the mobile revenue growth ambition and the company reported $40m of productivity benefits.

Staff numbers continue to drop. Headcount at the end of the financial year was 3317, that is down from 3847 a year earlier.

In July Spark said the business would reorganise into two divisions. One will focus on the company’s core telecommunications business while the other includes digital and technology services which are now considered non-core. A review of that unit is underway which can be interpreted as preparation for a possible sale.

Management is not forecasting a dramatic rebound next year. Guidance for Adjusted EBITDAI is in the $1,010 to $1,080 million range.

Key numbers

Headcount

Analysis: Spark turns back to mobile

Spark’s FY26 result gives us a snapshot of how one of the nation’s most important telcos is adapting to a changing market. The company remains a critical part of the nation’s telecommunications infrastructure.

While the results show the company’s core mobile business has improved, overall growth has yet to return. If you want a dramatic metaphor: Spark has stopped the bleeding but it has yet to heal.

The improved mobile growth is critical. Mobile is where the company’s future lies.

Spark’s lucrative legacy voice and DSL fixed-line business is almost gone, with the last connections due to close within the next two years. Reselling fibre broadband is fiercely competitive and is a low margin business. Digital services could be halfway out the door.

This is quite a different company to the Spark that spent the last 15 years trying to become a broader digital-services company after the Chorus demerger. But then, the telecoms market is also very different.

In other news...

• Datagrid pledges less water, generator use at Southland AI factory — RNZ
  Company says its location underpins sustainability.
• Consumers say telcos don’t keep promises — Reseller News
  Customers also feel loyalty goes unrewarded.
• Spark's future, rogue AI, aged care algorithms — RNZ
  Hear my initial reaction to the Spark result.

2degrees implements new network-level protection

2degrees says it has switched on automatic network-level protection that blocks connections to known malicious websites. The service uses near real-time threat intelligence from the National Cyber Security Centre’s Malware Free Networks service.

The protection is enabled by default for customers using its DNS servers, with no app, sign-up or additional cost. The telco says the protection can stop customers reaching malicious links in scam texts or emails.

This time last year the focus was on Spark’s poor result

Spark’s FY25 annual report saw the company’s profit fall by a third as it faced what chair Justine Smyth describes as “one of the most challenging periods in its history”.

Ten years ago the Commerce Commission launched an inquiry into telecommunications backhaul to determine if the regulations remained fit for purpose.

The move came as Chorus planned to introduce a new backhaul service connecting regional Ultrafast Broadband points of interconnection to major hubs. While the move aimed to lower costs for smaller ISPs, existing backhaul providers, including Kordia and Voyager, feared it would undermine their significant infrastructure investments. Critics argued Crown Fibre Holdings originally encouraged their investments, only for Chorus to enter and disrupt the market.

Despite appearing to be a probe into a competitive sector, Telecommunications Commissioner Stephen Gale stressed that backhaul remained critical to ensuring New Zealanders accessed high-quality broadband.

The Download Weekly is a New Zealand telecommunications industry newsletter written by Bill Bennett. You are welcome to pass it on to your friends and colleagues. While the newsletter is free, reader support helps enormously. A banner at the top of the page will take you to the support site.

Have your say. Sign up as a subscriber, it is free, to comment on any of the stories on this site. We don’t collect any personal data other than an email address.

Bill Bennett has covered New Zealand telecommunications for nearly 40 years and was named Tuanz Journalist of the Year 2025.