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Mobile shines for Spark, tower division planned

Download Weekly: This week saw a buoyant set of first half results from Spark, Chorus and Sky. Spark plans TowerCo spin-off.

Mobile shines for Spark, tower division planned

Spark reported a five percent lift in revenue to $1.9 billion as it turned in a strong set of figures for the first half of the 2022 year.

At $179 million, after tax profit is up 22 percent on the previous year.

The company announced plans to establish a separate TowerCo business unit to manage its 1500 mobile towers. This will allow it to attach fresh third-party capital.

Vodafone has previously talked of similar tower spin-off plans. Both companies now see the passive network infrastructure as not providing a competitive advantage.

Mobile service revenue was up five percent while broadband revenue fell 3.9 percent. The company maintained its gross broadband margin as it switched customers from fixed-line to fixed-wireless internet.

Spark says it plans to introduce further competitive wireless broadband offers in the second half of the year.

Cloud, security and service management revenues grew 3.2 percent. Spark says this growth was fuelled by demand for public cloud and growth in the health sector.

IoT connections surged 31 percent during the half year to 623,000.

Spark confirmed its Ebitda guidance range for the 2022 financial year at $1.13 to $1.16 billion and says it expects to come in at the top end of this range.

CEO Jolie Hodson says: “Despite closed borders keeping roaming revenues suppressed, we delivered a market-leading mobile performance, underpinned by precision marketing and increasing customer demand for data, with 48 percent growth in our Endless plans year-on-year.”

Chorus ups guidance as UFB near completion

Chorus reported a first half net profit of $42 million, up from $27 million in the same period in 2021.

Ebitda increased 5.5 percent to $347 million on a 1.3 revenue increase to $483 million.

Chorus says it aims to pay 35 cents per share this year and a minimum of 40 cents next year. In 2024 the planned payout rises to 45 cents. An interim payout of 14 cents per share is set for April.

The company says it will buy back up to $150 million shares over the next year.

Chorus CEO JB Rousselot says the government supported Ultrafast Broadband network build is nearing completion.

“Our fibre rollout is now close to completion with just 30,000 or so premises left to pass.More than 1.3 million homes and businesses have fibre at their doorstep; of these 67 percent have now chosen to connect.”

Fibre connections grew 47,000 in the first half of the year. They now total 918,000. Rousselot says Chorus is on track to meet its goal of a million connections by the end of the year.

A highlight of the year for Chorus was its move to boost basic fibre speeds to 300mbps. This has helped lift New Zealand up the world broadband speed rankings. It now ranks 11 in the world for fixed line broadband speeds.

Sky resumes dividend payment

Sky reported a first half net profit of $28.3 million, down from $39.6 million a year ago. Revenue was up four percent at $371.7 million with the company’s streaming revenue up 34 percent year on year. The company says it will return to paying a shareholder dividend from this year after putting payments on hold.

$47 million earmarked for rural broadband upgrades

Crown Infrastructure Partners has signed contracts with private sector contractors to work on a series of rural broadband upgrades.

The Rural Capacity Upgrade includes new towers in rural areas where there is poor wireless broadband performance. In other places existing towers will be upgraded. There are plans to extend fibre and VDSL coverage in places.

David Clark, the communications minister, says 47,000 rural households and businesses can expect faster internet speeds and better reception by the end of 2024.

Money for the upgrade comes from the government’s Covid response and recovery fund.

Clark says: “The Covid-19 pandemic has shown us reliable internet is critical to being able to work, learn and socialise from our homes. Having been through lockdowns, it’s clear some rural networks had real trouble adapting to the extra usage.”

Vodafone expands FiberSense monitoring pilot

Vodafone says it will expand its real time underground fibre cable monitoring trial. The trial uses FiberSense monitoring technology to check on more than 100km of fibre in the company’s central Wellington optical network. It looks for threats to the network from earthquakes and from civil works, water or gas leaks among other risks.

Improving Measuring Broadband New Zealand programme

Telecommunications commissioner Tristan Gilbertson says there are opportunities to improve the Measuring Broadband New Zealand programme and wants industry feedback on the ideas.

One option is to include more technologies, providers and plans in the coverage. This may include satellite broadband. Another is to include monitoring of in-home Wi-fi performance.

Submissions to the Commerce Commission close 16 March 2022.

Tuanz CEO Craig Young says the Measuring Broadband reports are important because the industry has used confusion as a marketing tactic. Being able to make better comparisons between providers changes that.

InternetNZ concerned about social media harm

In an opinion column published by Stuff, InternetNZ chief executive Jordan Carter warns of the dangers of a social media monopoly.

Carter quotes InternetNZ research which shows almost four out of five New Zealanders use one of the services operated by Meta each day. Meta is the new name for the Facebook organisation.

This, he says, means there is, in effect, a social media monopoly and that it is causing an ever increasing amount of harm. In particular he notes the negative impact of misinformation.

Tonga reconnects submarine cable

It took two weeks for engineers to restore the single submarine cable connecting Tonga to international networks. The international cable and the domestic cables connecting the nation’s islands were cut by the violent January volcanic eruption. While the external link is working again, connections between islands remain broken. Reports from Tonga say wireless communications are struggling to provide adequate coverage while the islands wait for cable repairs to complete.

In other news

CommsDay reports Singapore-based MyRepublic plans to launch mobile services in New Zealand.

The University of Waikato, Kordia and ASB have set up Scott Bartlett Memorial Scholarship to give financial support to final year students studying business management and the sciences. Each year three students will get the $4000 award. Former Kordia CEO Scott Bartlett died in 2020.