Spark grows revenue; Hyperfibre launches in Otago

Strong mobile growth drives Spark revenue up 4 percent

Spark reported a 4 percent increase in revenue to $1.82 billion for the first half of its 2020 reporting year. It is Spark's strongest first half revenue growth in four years.

The telco says much of the growth came from a 5.5 percent rise in mobile service revenues, which reached $653 million. Mobile margins also increased from 60 percent to 62 percent. Spark says this is the result of revenue growing faster than costs.

Jolie Hodson, Spark CEO, says the decision to shift to unlimited and high value plans helped the company beat its mobile growth targets in mobile.

Subscribers up

Subscriber numbers were up 1.5 percent year-on-year to 2.5m. This translates to a market share growth of 1.2 percent leaving Spark on 40.1 percent, it the biggest lead over its competitors since 2012.

Other high points include solid performance in cloud, security and service management growth where revenue was up 12.3 percent

Fixed-line voice revenues continued their long-term decline, dropping 11.6 percent. On a positive note, the rate of decline slowed during the half year.

Broadband flat

Broadband revenue for the half was flat at $345 million. The company lost 3000 connections in what it described as a “highly competitive and saturated market.”

During the period Spark back-pedalled on fixed wireless broadband sales. This was in the run up to Spark Sport's streaming coverage of the Rugby World Cup. The company acted to maximise customer experience of the games.

Spark's EBITDA grew 2.2 percent to $500 million. Net profit after tax was 9.2 percent up on a year earlier at $167 million.

Capex lower

Capital expenditure dropped to $247 million. The fall was, in part, thanks to Spark completing investment in its LoRaWAN network for the Internet of Things. Other investments increased. The additional spend included installing CDNs to manage Spark Sport's streaming service and more money going into the company's low-profile 5G roll-out.

Spark chair Justine Smyth say the result shows the company's three-year plan is paying off. She says: “We have made significant investments in Spark’s network infrastructure, which has improved our competitive advantage and diversified our business beyond traditional telecommunications into growth segments like digital services and sports streaming.”

Strong result at Vocus New Zealand lifts parent

Vocus' New Zealand business turned in a solid performance with revenue up 6 percent year-on-year to $188.5 million. EBITDA was also up 6 percent. The company said the result reflected a switch to targeting high-value customers. It also noted Spark's Rugby World Cup streaming helped grow the broadband business and encouraged customers to adopt other streaming services such as Netflix.

Elsewhere Vocus reports 68 percent of January sales for the company's Orcon brand were for gigabit fibre plans. Orcon is also the first retail service provider to sell Chorus's Hyperfibre service to high end users.

Otago first to Hyperfibre

Queenstown, Wanaka, Cromwell and Wakatipu are the New Zealand's First Hyperfibre towns. From yesterday customers in the Otago towns will be able to order 2 and 4 Gbps services from Orcon, the first retail service provider to offer Hyperfibre.

Hyperfibre is Chorus's brand for broadband services running faster than a gigabit. Customers in supported areas can order 2 or 4 Gbps connections now. Chorus plans to add an 8 Gbps service later. Hyperfibre connections are symmetrical, data travels up as fast as it travels down.

Chorus plans to extend Hyperfibre to Wellington in March. Nationwide rollout will start in September.

2degrees heading for CBD base

The New Zealand Herald reports 2degrees will be leaving its Newmarket headquarters. It is moving to a purpose-built office on Fanshaw Street in the centre of Auckland. The company is due to move more than 600 workers to the new building next year.

Tenancy Act changes get UFF tick

This week the government announced changes to tenancy laws making it easier for tenants to have fibre installed. The change requires landlords to 'permit and facilitate' fibre installations. There are exemptions.

John Hanna, CEO at UltraFast Fibre says: “...it’s pleasing to see the government introduce this change so everyone can access fibre and enjoy all the benefits this can bring, regardless of whether they own or rent their homes." The company says it will make a submission during the select committee process outlining its support for the UFB changes.