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Spark confirms guidance; focus on 5G

Thursday 7th November 2019

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Spark confirmed its full-year guidance and new chief executive Jolie Hodson reiterated that 5G remains a key focus of the company.

Spark told the annual shareholders' meeting that it continues to expect earnings before interest, tax, depreciation, amortisation and investment income between $1.1-1.12 billion in the current financial year. It also said its dividend guidance is still 25 cents per share – at least 75 percent imputed.

Ebitdai was $1.09 billion in the year ended June 30.  The annual dividend was 25 cents.

Spark’s shares last traded up 1 percent at $4.425 and up 6.3 percent year to date.

Chair Justine Smyth says the company is well advanced on its three-year plan and expects to provide more detail in the first half of the 2020 calendar year.

"You can expect to see us deepen our focus and investment in selected capabilities, such as smart networks, to unlock more value in our core telco business," she says. 

Hodson, who took over the reins on July 1 from Simon Moutter, said her immediate focus is on developing the firm's ambition and strategy in conjunction with the board for the next three years. She wants to "ensure the business continues to lead in service and technology, while investing in the right capabilities to remain competitive into the future.”

On 5G, she said one of the cornerstone partnerships for Spark’s 5G development is its relationship with Emirates Team New Zealand.

“The America’s Cup is increasingly a technology race. By partnering with Spark, the team now have Spark 5G while on the water - they can run multiple live video streams and real-time data back to their base,” she said.

She noted 5G won’t be a “switch we turn ‘on.” It is a continuous evolution and it is important that New Zealand keep pace with the rest of the world.

The spectrum band designated for 5G by the government is partially allocated until late 2022 which means long-term rights to use it will not come into effect for some time. In the interim, the government has commenced an accelerated process to open up access to some of the spectrum within that band on a short-term basis.

This will help bridge the gap until the full range of spectrum is available for use in 2022, said Hodson.

In the meanwhile, Spark has completed the biggest ever upgrade of its wireless network, which has increased capacity by about 80 percent over the past two years. The upgrade includes new cell sites and an extensive roll out of 4.5G, which significantly enhances network performance and capacity relative to 4G.

On Spark Sport “we believe that we have demonstrated that streaming is a successful solution that has delivered a great viewing result for the majority of customers."

Spark ended the Rugby World Cup 2019 with 200,000 Spark Sport Rugby World Cup subscriptions, meeting its original expectations when it purchased the rights, she said.

While there were issues with the New Zealand-South Africa pool match and a “small percentage of customers” who had persistent issues with streaming on Spark Sport, “when we consider the tournament as a whole, we are pleased with the way we delivered the Rugby World Cup to New Zealand,” she said.

She said the announcement that Spark Sport will be the official rights partner for all New Zealand Cricket matches played in New Zealand means the firm has "cemented our place as a significant player in New Zealand’s sports viewing landscape.”


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