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Chorus completes record fibre connections in September quarter

Thursday 11th October 2018

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Record new connections in the September quarter saw fibre overtake copper ADSL as Chorus's biggest connection-type.

The company installed 50,000 new fibre connections in the quarter. That took connections to 479,000 at Sept. 30, up 46 percent from the same quarter a year earlier and 32 percent of Chorus's 1.51 million total connections.

Copper ADSL connections have dropped 28 percent in the past year to 402,000, while the higher-value copper VDSL connections were up 5.1 percent at 309,000. Across all connection types Chorus lost 19,000 during the quarter and 75,000 - or 4.7 percent - in the past year.

Chorus boosted its marketing effort this year to fend off increased competition from retail service provider Spark New Zealand which has pitched its hybrid wireless technology as an alternative to the fixed-line network. At the same time, the network provider is preparing for a new regulatory regime set to be passed in Parliament next week setting the level of pricing on fibre services and the pace for deregulating copper services. 

"In Chorus fibre areas, the decline in copper lines with no broadband is being largely offset by strong broadband growth," the company said. "The majority of the decline in total connections was in other fibre company zones as expected given fibre demand."

Growing demand for broadband use has supported uptake on the fibre network. Chorus said average monthly household use rose to 221 gigabytes in the September quarter from 210GB in June and 162GB a year earlier. Fibre customers have a higher average use at 307GB a month, up from 297GB in June and 251GB in September last year. 

Chorus said 950,000 customers are able to connect to fibre with 714,000 premises passed. That lifted ultrafast broadband uptake to 50 percent from 45 percent in June and about 40 percent a year earlier. By December 2022 it plans to have passed 1.05 million premises with 1.36 million customers able to connect. 

The company scaled back the number of field crews in the quarter to 770 from 800 in June, with work in progress down 5,000 to 25,000. The average lead time also fell to eight days from 13 days. 

Chorus's use of subcontractors to build the network has attracted the attention of regulators with a Labour Inspectorate investigation finding widespread employment breaches among small cable installation firms.

The network operator contracts out the bulk of the work to VisionStream, Downer, Broadspectrum and UCG and has hired consultancy Martin Jenkins to independently review subcontractor employment practices. The company has previously investigated claims a service company employed workers on a voluntary basis, and that firm subsequently ended a subcontractor relationship. 

Chorus shares last traded at $4.83 and have gained 15 percent so far this year. 

(BusinessDesk)

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