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Chorus connections keep falling in December quarter, expects data usage to grow in 2018

Thursday 18th January 2018

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Chorus lost 23,000 fixed-line connections in the final three months of 2017, shedding lines at the same pace as the September quarter when it embarked on a marketing campaign extolling the virtues of fixed-line service. 

The Wellington-based telecommunications network operator's total connections shrank to 1.56 million as at Dec. 31 from 1.58 million as at Sept. 30, and down from 1.68 million a year earlier. Within that, broadband connections decreased 3,000 to 1.18 million in the quarter and were down from 1.21 million a year earlier. 

Chorus identified connection losses as one of its biggest challenges last year when Spark New Zealand - its biggest customer - launched a fixed wireless broadband product as an alternative to the traditional copper-based connection, prompting the network operator to promote its fixed-line business more aggressively and staunching the outflow. 

Chief executive Kate McKenzie has started encroaching on Spark's turf, floating the prospect of a shared infrastructure build for fifth-generation mobile network infrastructure along the same lines as the government-sponsored ultra-fast broadband fibre network. Chorus is already dabbling in wireless technology in a pilot project with Network For Learning expanding wi-fi access for schools in an effort to bridge a gap between classrooms and homes. 

Chorus's fibre connections now account for 31 percent of broadband connections, rising 34,000 in the December quarter to 362,000, compared to 19 percent of broadband connections at 231,000 a year earlier. Within UFB areas the fibre update is 42 percent, compared to 39 percent in September. 

Monthly average data usage per connection rose to 174 gigabytes from 162GB in the September quarter, with fibre users averaging 250GB a month compared to 141GB on copper. 

The company noted the rising use of online streaming video as driving growth in data use last year, and network strategy manager Kurt Rodgers said he expects 2018 usage will keep growing as smart home devices become more popular and smart phones are increasingly used over home wi-fi networks.

Chorus shares fell 0.7 percent to $4.15 and have increased 1.7 percent over the past 12 months. The stock is rated an average 'hold' based on five analyst recommendations compiled by Reuters with a median price target of $4.29. 

(BusinessDesk)

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