Chorus Q4 FY18 Connections Update

Chorus Limited
Level 10, 1 Willis Street
P O Box 632
Wellington
New Zealand

Email: company.secretary@chorus.co.nz





STOCK EXCHANGE ANNOUNCEMENT

13 July 2018


Chorus Q4 FY18 Connections Update

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.

 Total fixed line connections declined by 17k to 1,526,000 in Q4 (Q3: -16k), with
most of the reduction in other fibre company zones. For FY18: total connections
reduced by 76k (FY17: -125k)
 Total broadband connections grew by 3k to 1,187,000 in Q4 (Q3: +3k). For
FY18, total broadband connections increased by 1k (FY17: -40k)
 UFB uptake grew to 45%, with fibre connections now exceeding ADSL connections for
the first time.
 69% of mass market fibre connections now on 100Mbps; 1Gbps connections grew
strongly to 30,000
 Peak time data demand continues to surge with 210GB monthly average household
data usage in June 2018, up from 185GB in March. Fibre users average 297GB
monthly, up from 268GB in March.


ENDS


For further information:

Nathan Beaumont
Stakeholder Communications Manager
Phone: +64 4 896 4352
Mobile: +64 (21) 243 8412
Email: nathan.beaumont@chorus.co.nz
Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: brett.jackson@chorus.co.nz

---

Q4 FY18 Connections Update
13 July 2018

>Total fixed line connections declined by 17k to 1,526,000 in Q4 (Q3: -16k), with most of the
reduction in other fibre company zones
▪For FY18: total connections reduced by 76k (FY17: -125k)
>Total broadband connections grew by 3k to 1,187,000 in Q4 (Q3: +3k)
▪For FY18, total broadband connections increased by 1k (FY17: -40k)
▪UFB uptake grew to 45%, with fibre connections now exceeding ADSL connections for the first time
▪69% of mass market fibre connections now on 100Mbps; 1Gbps connections grew strongly to 30,000
>Peak time data demand continues to surge
▪210GBmonthly average household data usage in June 2018, up from 185GB in March
▪Fibre users average 297GBmonthly, up from 268GB in March
13 July 2018
Q4 FY18 CONNECTIONS UPDATE
2
Broadband demand grew strongly in Chorus UFB areas, with reductions in total
fixed line connections consistent with Q3
Q4 FY18 overview

13 July 2018
Q4 FY18 CONNECTIONS UPDATE
3
Q4 Connection Trends
30 June
2017
30 Sept
2017
31 Dec
2017
31 March
2018
30 June
2018
Unbundled
copper
82,00076,00068,00062,00053,000
Baseband
copper
(no broadband)
313,000302,000290,000279,000268,000
Fibre
broadband
(GPON)
292,000328,000362,000394,000433,000
VDSL
(includes naked)
244,000294,000320,000325,000321,000
Copper ADSL
(includes naked)
650,000562,000499,000465,000433,000
Data services
(copper)
8,0007,0007,0006,0006,000
Fibre premium
(P2P)
13,00013,00013,00012,00012,000
Total
connections
1,602,0001,582,0001,559,0001,543,0001,526,000
0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
1800000
Data services (copper)Fibre premium (P2P)
Fibre broadband (GPON)VDSL
Copper ADSLUnbundled copper (no broadband)
Baseband copper (no broadband)
Fibre (GPON)
VDSL
Copper ADSL
Unbundled copper
Baseband copper

▪broadband connections increased within the Chorus UFB zone, largely offsetting voice/UCLL declines
▪broadband demand remained stable in Rural (non-UFB) zone, voice connections continued to reduce
▪slight increase in connection loss in the Local Fibre Company UFB zone at 13k vs 11k in Q3
13 July 2018
Q4 FY18 CONNECTIONS UPDATE
4
Connections by Zone -indicative
Category
Chorus
UFB zone*
Q4
change
Rural
(non-UFB)
zone
Q4
change
Local Fibre
Company
UFB zone
Q4
changeTOTAL
Copper
connections: no
broadband
206,000-13k51,000-3k64,000-4k321,000
Broadband:copper
+ fibre
917,000+12k143,000N/C127,000-9k1,187,000
TOTAL1,123,000194,000191,0001,508,000**
* Includes planned UFB1, 2 and 2+ coverage
**Excludes the 18k fibre premium and data services (copper) connections

13 July 2018
Q4 FY18 CONNECTIONS UPDATE
5
Fibre uptake and usage
0
10
20
30
40
50
60
70
80
90
100
Jun-16Sep-16Dec-16Mar-17Jun-17Sep-17Dec-17Mar-18Jun-18
50Mbps100Mbps200MbpsGigabitEducationBusiness 100Mbps+
0
50
100
150
200
250
300
CopperFibreAverage
% of
plans
Data
usage
(GB)
Monthly average data usage
per connection on our network
Total mass market fibre uptake by plan type
>39,000mass market fibre connections added in Q4
▪30,000 connections now on gigabit plans (Q3: 25,000)
▪69% of mass market fibre connections on 100Mbps
▪100/20Mbps pricing increased to $45 monthly from 1 July
>Monthly average data usage per connection on our
network grew to 210GBfrom 185GB (March 2018)
▪297GBon fibre (March: 268GB)
▪160GBon copper (March:144GB)
$41.50
monthly
$45
monthly

13 July 2018
Q4 FY18 CONNECTIONS UPDATE
6
37% growth in June traffic peak year on year
Network
throughput
(Tbps)
0.000
0.200
0.400
0.600
0.800
1.000
1.200
1.400
1.600
1.800
12:00:00 a.m.12:45:00 a.m.
1:30:00 a.m.2:15:00 a.m.3:00:00 a.m.3:45:00 a.m.4:30:00 a.m.5:15:00 a.m.6:00:00 a.m.6:45:00 a.m.7:30:00 a.m.8:15:00 a.m.9:00:00 a.m.9:45:00 a.m.
10:30:00 a.m.11:15:00 a.m.
12:00:00 p.m.12:45:00 p.m.
1:30:00 p.m.2:15:00 p.m.3:00:00 p.m.3:45:00 p.m.4:30:00 p.m.5:15:00 p.m.6:00:00 p.m.6:45:00 p.m.7:30:00 p.m.8:15:00 p.m.9:00:00 p.m.9:45:00 p.m.
10:30:00 p.m.11:15:00 p.m.
Current peak traffic
record of 1,658Gbps on
1
st
May 2018
June 2017
average peak throughput
June 2018
average peak throughput
Time of day

>Record quarter for fibre installations
47kfibre installations completed
field crews increased from 720 to 800
work in progress steady at 30k
weighted average lead times grew from 8 to 13 days
as year-end release of new areas increased demand
>45% UFB uptake at 30 June (Q3: 43%)
415,000 connections (Q3: 373,000)
932,000customers able to connect (Q3: 863,000)
700,000 premises passed (Q3: 643,000); includes
15,000 greenfieldsand 6,000 UFB2 premises
13 July 2018
Q4 FY18 CONNECTIONS UPDATE
7
Fibre demand steps up
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
UFB rollout and uptake
UFB connectionsUFB available addresses
Planned footprint% Uptake (RHS)
No. of
connections
Premisesto pass by Dec 2022~1,054,000*
Customers able to connect ~1.36 million
*Includes estimated 43k greenfieldspremises for UFB1
Uptake

13 July 2018
Q4 FY18 CONNECTIONS UPDATE
8
UPTAKE BY UFB1 AREA
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Jun-17Sep-17Dec-17Mar-18Jun-18
ROLLOUT COMPLETED IN
THESE AREAS
Note: % uptake can reduce in areas as the fibre
rollout passes more addresses in a period
45%
AVERAGE
UPTAKE
% uptake
relative to
capable
addresses

13 July 2018
Q4 FY18 CONNECTIONS UPDATE
9
NZ broadband market trends -IDC (Q1 2018)
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
Broadband uptake by retailer (all technology)
SparkVodafoneVocus2degreesTrustpowerROM
Source: IDCSource: IDC
-
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
1,800,000
NZ broadband market –by technology
Chorus xDSLChorus mass market fibreChorus premium fibre
Local fibre companies (UFB)Other fibre networksOther xDSL
Vodafone cableFixed (mobile) wirelessLegacy fixed wireless, satellite