Chorus Q1 FY19 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

11 October 2018


Chorus Q1 FY19 Connections Update

The Q1 period to 30 September 2018 saw broadband demand continue to grow strongly in
Chorus fibre areas, with UFB uptake reaching 50% following a record quarter for new fibre
installations.

 Total fixed line connections declined by 19k to 1,507,000 in Q1 (Q4 FY18: -17k)
 In Chorus fibre areas, the decline in copper lines with no broadband is being largely
offset by strong broadband growth. The majority of the decline in total connections
was in other fibre company zones as expected given fibre demand.
 Total broadband connections grew by 3k to 1,190,000 (Q4 FY18: +3k).
 Fibre demand was strong through Q1, with a record 50,000 fibre installations
completed.
 UFB uptake grew to 50% from 45% (30 June) within Chorus’ completed areas.
 1Gbps connections grew 20% to 36,000.
 The surge in data demand continues with 221GB monthly average household data
usage in September, up from 210GB in June, and fibre users now averaging 307GB
monthly, up from 297GB in June.


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

---

Q1 FY19 Connections Update
11 October 2018

>Total fixed line connections declined by 19k to 1,507,000 in Q1 (Q4 FY18: -17k)
▪in Chorus fibre areas, the decline in copper lines with no broadband is being largely offset by strong
broadband growth
▪the majority of the decline in total connections was in other fibre company zones as expected given
fibre demand
>Total broadband connections grew by 3k to 1,190,000 (Q4 FY18 : +3k)
▪fibre demand was strong through Q1, with a record 50,000fibre installations completed
▪UFB uptake grew to 50%from 45% (30 June) within Chorus’ completed areas
▪1Gbps connections grew 20% to 36,000
>Surge in data demand continues
▪221GBmonthly average household data usage in September, up from 210GB in June
▪fibre users now average 307GBmonthly, up from 297GB in June
11 October 2018
Broadband demand continued to grow strongly in Chorus fibre areas, with UFB
uptake reaching 50% following a record quarter for new fibre installations
Q1 FY19 overview
2
Q1 FY19 CONNECTIONS UPDATE

0
200000
400000
600000
800000
1000000
1200000
1400000
1600000
30-Jun-1730-Sep-1731-Dec-1731-Mar-1830-Jun-1830-Sep-18
Data services (copper)Fibre premium (P2P)
Fibre broadband (GPON)VDSL
Copper ADSLUnbundled copper (no broadband)
Baseband copper (no broadband)
11 October 2018
30 Sept
2017
31 Dec
2017
31 March
2018
30 June
2018
30 Sept
2018
Unbundled
copper
76,00068,00062,00053,00045,000
Baseband
copper
(no broadband)
302,000290,000279,000268,000255,000
Fibre broadband
(GPON)
328,000362,000394,000433,000479,000
VDSL
(includes naked)
294,000320,000325,000321,000309,000
Copper ADSL
(includes naked)
562,000499,000465,000433,000402,000
Data services
(copper)
7,0007,0006,0006,0005,000
Fibre premium
(P2P)
13,00013,00012,00012,00012,000
Total connections
1,582,0001,559,0001,543,0001,526,0001,507,000
Fibre (GPON)
VDSL
Copper ADSL
Unbundled copper
Baseband copper
Q1 connection trends
3
Q1 FY19 CONNECTIONS UPDATE

▪the indicative data below includes revised 30 June totals to better reflect all UFB zone boundaries
▪the Rural zone includes ~13k fibre premises and the LFC zone ~3k fibre premises
11 October 2018
Connections by Zone -indicative
INDICATIVE
CONNECTIONS
Chorus
UFB zone*
Rural
(non-UFB)
zone
Local Fibre
Company
UFB zoneTOTAL
TOTAL 30 June1,108,000206,000194,0001,508,000**
TOTAL 30 Sept1,106,000203,000181,0001,490,000**
Copper
connections: no
broadband
189,00050,00061,000300,000
Broadband:copper
+ fibre
917,000153,000120,0001,190,000
* Includes planned UFB1, 2 and 2+ coverage
**Excludes fibre premium and data services (copper) connections
-15
-2
-4
13
-1
-9
-20
-15
-10
-5
0
5
10
15
Chorus UFBRuralLFC UFB
Q1 –net change by zone
Copper (no broadband)
Broadband (fibre or copper)
4
Q1 FY19 CONNECTIONS UPDATE

>46,000mass market fibre connections added in Q1
▪36,000 connections now on gigabit plans (Q4: 30,000)
▪70% of mass market fibre connections on 100Mbps
11 October 2018
Fibre uptake and data demand
0
10
20
30
40
50
60
70
80
90
100
Jun-16Sep-16Dec-16Mar-17Jun-17Sep-17Dec-17Mar-18Jun-18Sep-18
50Mbps100Mbps200MbpsGigabitEducationBusiness 100Mbps+Other
0
50
100
150
200
250
300
350
CopperFibreAverage
% of
plans
Data
usage
(GB)
Monthly average data usage
per connection on our network
Total mass market fibre uptake by plan type
>Monthly average data usage per connection on our
network grew to 221GBfrom 210GB (June 2018)
▪307GBon fibre (June: 297GB)
▪163GBon copper (June:160GB)
$41.50 monthly
$45 monthly
$65 monthly
5
Q1 FY19 CONNECTIONS UPDATE

11 October 2018
71% of NZ broadband connections had no data cap at 30 June 2018
5%
8%
33%
50%
62%
71%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
201320142015201620172018
Share of connections by data cap
Unlimited
100GB or more
50GB to 100GB
20GB to 50GB
5GB to 20GB
Under 5GB
Source: Statistics NZ ISP Survey June 2018
Streaming is driving shift to unlimited data plans
>~1.3m broadband connections are
believed to be on unlimited data
plans, up from ~130k in 2014
6
Q1 FY19 CONNECTIONS UPDATE

UFB uptake reaches 50%
>50% UFB uptake at 30 Sept (30 June: 45%)
472,000 connections
950,000customers able to connect
714,000 premises passed
11 October 2018
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
Uptake
Premisesto pass by Dec 2022~1,054,000*
Customers able to connect ~1.36 million
*Includes estimated 43k greenfieldspremises for UFB1
Uptake
Record quarter for fibre installations
50kfibre installations completed (NZ wide)
field crews reduced to 770vs 800 at 30 June
work in progress reduced to 25kvs 30k at 30 June
weighted average lead times reduced to 8 days vs 13
days at 30 June
7
Q1 FY19 CONNECTIONS UPDATE

11 October 2018
40% growth in traffic peak: Sept 2017-2018
Network
throughput
(Tbps)
Time of day
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
Average Peak Throughput -September
20182017
Fortniteeffect: record
peak traffic 1,792Gbps
on 12 July 2018
8
Q1 FY19 CONNECTIONS UPDATE

11 October 2018
0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
Dec-17Mar-18Jun-18Sep-18
ROLLOUT COMPLETED IN
THESE AREAS
Note: % uptake can reduce in areas as the fibre
rollout passes more addresses in a period
50%
AVERAGE
UPTAKE
% uptake
relative to
capable
addresses
UFB1 uptake by area
9
Q1 FY19 CONNECTIONS UPDATE