Chorus Q2 FY21 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

26 January 2021

Q2 FY21 overview

Fibre uptake increased to 63% with the UFB rollout now 92% complete

Fibre broadband connections increased by 29k (Q1 FY21: +33k; Q2 FY20: +36k)
• 1Gbps connections increased 8k
• fibre uptake across the completed UFB footprint grew from 62% to 63%
• fibre uptake in UFB1 areas is at 66%, with growth strongest in Kapiti/Wellington and
Waiheke Island
• recently completed UFB2 townships include Matapouri, Taipa Bay
Mangonui, Taumarunui, Karapiro, Hunterville, Cheviot, Amberley, Lawrence
• average monthly data usage on fibre increased to 460GB, up from 456GB in Sept (including
upstream traffic)

Copper broadband and voice connections declined by 50k (Q1 FY21: -57k; Q2 FY20: -48k)

Total broadband connections declined by 10k to 1,183,000* (Q1 FY21: -13k; Q2 FY20: no change)
• Q2 reduction in broadband reflects combined seasonal effect of student holiday
disconnections (e.g. fibre uptake reduced in Dunedin), inertia selling campaigns by fixed
wireless providers and COVID-19 impact on net migration
• Statistics NZ notes COVID border restrictions have reduced population growth significantly,
with the gain from migration reducing from 6,000 a month pre-COVID to ~600 a month

Total fixed line connections declined by 21k to 1,369,000* (Q1 FY21: -25k; Q2 FY20: -12k)

*totals exclude the 11,000 broadband connections Chorus is currently providing free to student households

For more detail, please see the Q2 FY21 Connections Update presentation attached.

Authorised by:
David Collins
Chief Financial Officer

ENDS

For further information:

Steve Pettigrew
Head of External Communications

Mobile +64 (27) 258 6257
Email: Steve.Pettigrew@chorus.co.nz
Brett Jackson
Investor Relations Manager
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: Brett.Jackson@chorus.co.nz

---

Q2 FY21 Connections Update
26 January 2021

>Fibre broadband connections increased by 29k (Q1 FY21: +33k; Q2 FY20: +36k)
▪1Gbps connections increased 8k
▪fibre uptake across the completed UFB footprint grew from 62% to 63%
▪fibre uptake in UFB1 areas is at 66%, with growth strongest in Kapiti/Wellington and Waiheke Island
▪recently completed UFB2 townships include Matapouri, Taipa Bay-Mangonui, Taumarunui, Karapiro, Hunterville,
Cheviot, Amberley, Lawrence
▪average monthly data usage on fibreincreased to 460GB, up from 456GB in Sept (including upstream traffic)
>Copper broadband and voice connections declined by 50k (Q1 FY21: -57k; Q2 FY20: -48k)
>Total broadband connections declined by 10k to 1,183,000* (Q1 FY21: -13k; Q2 FY20: no change)
▪Q2 reduction in broadband reflects combined seasonal effect of student holiday disconnections (e.g. fibre
uptake reduced in Dunedin), inertia selling campaigns by fixed wireless providers and COVID-19 impact on net
migration
▪Statistics NZ notes COVID border restrictions have reduced population growth significantly, with the gain from
migration reducing from 6,000 a month pre-COVID to ~600 a month
>Total fixed line connections declined by 21k to 1,369,000* (Q1 FY21: -25k; Q2 FY20: -12k)
*totals exclude the 11,000 broadband connections Chorus is currently providing free to student households
26 January 2021
Q2 FY21 overview
Fibre uptake increased to 63% with the UFB rollout now 92% complete
2
Q2 FY21 CONNECTIONS UPDATE

29,000mass market fibre connections added
▪1Gbps connections grew from 128k to 136k
(i.e. 28% of 29k increase in fibre GPON
connections in Q2)
▪small business connections grew from 4k to
11k
0
10
20
30
40
50
60
70
80
90
100
Dec-19Mar-20Jun-20Sep-20Dec-20
% of
plans
Total mass market fibre uptake by plan type
50Mbps
100Mbps
1Gbps
26 January 2021
1Gbps uptake grew by 8k connections
200Mbps
$60 p.m.
$46 p.m.
$42.50 p.m.
$55 p.m.
Business/Education plans
$56 p.m.
from 1 July
$43.56 p.m.
from 1 Oct
$47.15 p.m.
from 1 Oct
$56.38 p.m.
from 1 Oct
3
Q2 FY21 CONNECTIONS UPDATE

▪managed migration installations (i.e. ONT only without
active service) were higher again in Q2 at 15.5k,
including 9k offnet addresses
▪migration activity driving positive momentum in
connections with more than 7k ONT activations in Q2
▪3k of activations were at offnet addresses, with ~20%
of these in HFC cable areas
26 January 2021
Managed migration activity lifts fibre connections
15.5k installations completed in Q2
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Q3 FY20Q4 FY20Q1 FY21Q2 FY21
Managed migration programme
InstallationsConnections
4
Q2 FY21 CONNECTIONS UPDATE

UFB uptake reaches 63%
>UFB uptake increased from 62% to 63% within
completed footprint in Q2*
▪uptake in UFB1 areas grew from 65% to 66%
▪uptake in UFB2 areas grew from 38% to 39%
▪783,000 connections (Q1: 757,000) now within completed
footprint, including business premium connections
▪1,246,000customers able to connect (Q1: 1,226,000)
▪966,000premises passed** (Q1: 947,000) out of
1,054,000 target = UFB rollout 92% complete
(note: data includes some UFB2 areas that have been partially built, but not
yet submitted for Crown sign-off)
>44,000fibre installations completed in Q2 (Q1: 47k)
▪customer satisfaction steady at 8.2
▪WIP reduced to 13k from 15k (Sept)
▪field crews increased from 646 (Sept) to 689
* includes ~3k free education connections
**under the UFB contract, a multi-dwelling unit or single office block is one premises
Uptake
26 January 2021
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Dec-19Mar-20Jun-20Sep-20Dec-20
ADSLVDSLFibre
Fibrenow 79% of Chorus broadband
connections in planned UFB zone
No. of
connections
5
Q2 FY21 CONNECTIONS UPDATE

0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Dec-19Mar-20Jun-20Sep-20Dec-20
% uptake
relative to
capable
addresses
UFB1 uptake: 66%
26 January 2021
Average uptake
6
Q2 FY21 CONNECTIONS UPDATE

26 January 2021
Connection changes by Zone (indicative)
Chorus UFB
zone*
Non-UFB
zone
Local Fibre
Company
UFB zone
Total connections at
31 December**
1,076,000191,00088,000
Broadband connections974,000153,00056,000
Copper (no broadband)
connections
102,00038,00032,000
* Includes planned Chorus UFB1, 2 and 2+ coverage
**Excludes 14k fibre premium and data services (copper) connections
-4
-2
8
3
7
-2
1
-6
-9
-4
-8
-7
-7
-8
-5
-5
-8
-1
-1
-1
-1
-2
-3
-2
-2
-2
-2
-15-5515
Q2 FY21
Q1 FY21
Q4 FY20
Q3 FY20
Q2 FY20
Q2 FY21
Q1 FY21
Q4 FY20
Q3 FY20
Q2 FY20
Q2 FY21
Q1 FY21
Q4 FY20
Q3 FY20
Q2 FY20
Broadband connections
Copper (no broadband) connections
LFC
Zone
Non-
UFB
Zone
Chorus
UFB Zone
N/C
Change in connections (‘000s) by zone**
>Chorus UFB zone: reduction in broadband reflects combined
effects of university holiday disconnections, COVID-19 effect on
net migration and inertia selling campaigns by fixed wireless
providers
>LFC zone: disconnections consistent with pre-COVID levels
>Non-UFB zone: fibre connection growth helping offset rural
wireless competition
7
Q2 FY21 CONNECTIONS UPDATE

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
31-Dec-1931-Mar-2030-Jun-2030-Sep-2031-Dec-20
26 January 2021
31 Dec
2019
31 March
2020
30 June
2020
30 Sept
2020
31 Dec
2020
Unbundled copper
(no broadband)
18,00017,00015,00014,00013,000
Baseband copper
(no broadband)
192,000185,000179,000169,000159,000
Copper ADSL
(includes naked)
283,000261,000245,000218,000197,000
VDSL
(includes naked)
242,000228,000221,000202,000184,000
Fibre broadband
(GPON)
681,000713,000740,000773,000802,000
Data services
(copper)
4,0004,0004,0003,0003,000
Fibre premium
(P2P)
12,00011,00011,00011,00011,000
Total connections
1,432,0001,419,0001,415,0001,390,0001,369,000
Fibre (GPON)
VDSL
Copper ADSL
Unbundled copper
Baseband copper
Fibre comprises 59% of Chorus connections
>1,183,000 broadband connections comprises:
▪802,000 fibre (GPON) connections
▪381,000 VDSL/ADSL (copper) connections
Business premium
Note: 11,000 free education connections are excluded from this data
8
Q2 FY21 CONNECTIONS UPDATE

Monthly average data usage on fibre 460 gigabytes
>monthly average data usage per connection on our
network grew to 390GBin December, up from 380GB
(Sept)
▪460GBon fibre (Sept:456GB)
▪241GBon copper (Sept:236GB)
>Average peak throughput on our network at peak time
(~9pm) was 2.44Tbps, up from 1.96Tbps in December
2019
26 January 2021
241
460
390
0
50
100
150
200
250
300
350
400
450
500
Dec-14
Mar-15
Jun-15
Sep-15
Dec-15
Mar-16
Jun-16
Sep-16
Dec-16
Mar-17
Jun-17
Sep-17
Dec-17
Mar-18
Jun-18
Sep-18
Dec-18
Mar-19
Jun-19
Sep-19
Dec-19
Mar-20
Jun-20*
Sep-20*
Dec 20*
CopperFibreAverage
Data
usage
(GB)
Monthly average data usage per connection on
our network*
* includes upstream traffic from June 2020 onwards
9
Q2 FY21 CONNECTIONS UPDATE

26 January 2021
Commission report: VDSL outperforms fixed wireless
▪The Commerce Commission’s Measuring Broadband New Zealand, Spring Report (December 2020) showed copper VDSL
services outperformed fixed wireless on key measures such as download speeds and latency
10
Q2 FY21 CONNECTIONS UPDATE