Friday 13th July 2018
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Chorus lifted its fibre connections 9.9 percent in the June quarter, putting the ultra-fast broadband lines on an equal footing with its ADSL copper connections.
The Wellington-based telecommunications network operator added 3,000 broadband connections in the three months ended June 30, taking total connections to 1.19 million, of which 45 percent are the high-speed fibre lines. Chorus added 1,000 connections in the financial year, turning around a loss of 40,000 in the 2017 year. Total fixed-line connections fell 16,000 to 1.53 million, largely due to customers in other local fibre company zones swapping to the high-speed service.
The uptake was driven by fibre, which added 39,000 connections in the quarter to sit at 433,000 as at June 30, up from 292,000 a year earlier. The company's ADSL copper lines fell 6.9 percent to 433,000 and were down from 650,000 a year earlier as more New Zealanders switch to the newer technology. VDSL connections, which run over the copper lines, fell 4,000 to 321,000 in the June quarter, and were up from 244,000 a year earlier.
"The Q4 period to 30 June 2018 saw broadband demand grow strongly in Chorus UFB areas, with reductions in total fixed line connections consistent with Q3," the company said in a statement. "UFB uptake grew to 45 percent, with fibre connections now exceeding ADSL connections for the first time."
Chorus has been promoting its fixed-line business more aggressively over the past year in response to its biggest customer, Spark New Zealand, trying to cut its reliance on the network, through fixed-wireless services. The network operator is also preparing for a new framework setting the level of regulated prices on the fibre network and when the copper services can be deregulated.
At the half-year update Chorus chief executive Kate McKenzie said the company's successes in mitigating customer losses meant she expected annual earnings before interest, tax, depreciation and amortisation to be at the top end of the $625 million-to-$650 million range. The company hasn't altered that guidance.
The network operator is building the bulk of the nation's state-sponsored fibre network, and had passed 700,000 premises as at June 30, up from 643,000 three months earlier. That included 15,000 greenfield sites and 6,000 premises in the second tranche of the UFB programme.
The shares last traded at $4.37 and have gained 4.1 percent so far this year, lagging behind a 7 percent increase on the S&P/NZX 50 index. The stock is rated an average 'buy' based on five analyst recommendations compiled by Reuters, with a target price ranging from $3.75 to $4.60.
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