Chorus Q3 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

15 April 2021

Q3 FY21 overview

Total fixed line connections declined by 13k to 1,356,000*

Copper broadband and voice connections declined by 42k (Q2 FY21: -50k; Q3 FY20: -44k)
• fixed wireless providers are continuing inertia selling campaigns to their fixed line customers
• 2degrees has begun promoting fixed wireless
• Vodafone introduced new $40 4G fixed wireless plan with 60GB data

Total broadband connections declined by 2k to 1,181,000* (Q2 FY21: -10k; Q3 FY20: -4k)
• return of students from holidays helped restore some prior period disconnections
• COVID-19 impact on net migration and population growth continues to constrain broadband
growth

Fibre broadband connections increased by 29k (Q2 FY21: +29k; Q3 FY20: +32k)
• 1Gbps consumer connections increased 7k
• fibre uptake across the completed UFB footprint grew from 63% to 64%, with Chorus’ managed
migrations programme adding another 7k activations
• average monthly data usage on fibre increased to 491GB, up from 460GB in Dec (including
upstream traffic)
• Sky TV began promoting fibre broadband to its existing customer base towards the end of Q3

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



Authorised by:
JB Rousselot
Chief Executive 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

---

Q3 FY21 Connections Update
15 April 2021
Q3 FY21 CONNECTIONS UPDATE

>Copper broadband and voice connections declined by 42k (Q2 FY21: -50k; Q3 FY20: -44k)
▪fixed wireless providers are continuing inertia selling campaigns to their fixed line customers
▪2degrees has begun promoting fixed wireless
▪Vodafone introduced new $40 4G fixed wireless plan with 60GB data
>Total broadband connections declined by 2k to 1,181,000* (Q2 FY21: -10k; Q3 FY20: -4k)
▪return of students from holidays helped restore some prior period disconnections
▪COVID-19 impact on net migration and population growth continues to constrain broadband growth
>Fibre broadband connections increased by 29k (Q2 FY21: +29k; Q3 FY20: +32k)
▪1Gbps consumer connections increased 7k
▪fibre uptake across the completed UFB footprint grew from 63% to 64%, with Chorus’ managed migrations
programme adding another 7k activations
▪average monthly data usage on fibre increased to 491GB, up from 460GB in Dec (including upstream traffic)
▪Sky TV began promoting fibre broadband to its existing customer base towards the end of Q3
*totals exclude ~11,000 broadband connections Chorus is currently providing free to student households
15 April 2021
Q3 FY21 overview
Total fixed line connections declined by 13k to 1,356,000* (Q2 FY21: -21k)
Q3 FY21 CONNECTIONS UPDATE
2

15 April 2021
Connection changes by Zone (indicative)
Chorus UFB
zone*
Non-UFB
zone
Local Fibre
Company
UFB zone
Total connections at
31 March**
1,074,000188,00080,000
Broadband connections980,000151,00050,000
Copper (no broadband)
connections
94,00037,00030,000
* Includes planned Chorus UFB1, 2 and 2+ coverage
**Excludes 14k fibre premium and data services (copper) connections
6
-4
-2
8
3
-2
-2
1
-6
-6
-9
-4
-8
-8
-7
-8
-5
-5
-1
-1
-1
-1
-1
-2
-3
-2
-2
-2
-15-5515
Q3 FY21
Q2 FY21
Q1 FY21
Q4 FY20
Q3 FY20
Q3 FY21
Q2 FY21
Q1 FY21
Q4 FY20
Q3 FY20
Q3 FY21
Q2 FY21
Q1 FY21
Q4 FY20
Q3 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: return to broadband growth reflects return
of students and premises growth, while fixed wireless providers
continued inertia selling campaigns targeting copper voice and
broadband customers
>LFC zone: disconnections continue at consistent rate reflecting
Local Fibre Company and fixed wireless provider activity
>Non-UFB zone: increasing rural wireless competition as mobile
providers expand wireless coverage and capacity
Q3 FY21 CONNECTIONS UPDATE
3

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
31-Mar-2030-Jun-2030-Sep-2031-Dec-2031-Mar-21
15 April 2021
31 March
2020
30 June
2020
30 Sept
2020
31 Dec
2020
31 March
2021
Unbundled copper
(no broadband)
17,00015,00014,00013,00011,000
Baseband copper
(no broadband)
185,000179,000169,000159,000150,000
Copper ADSL
(includes naked)
261,000245,000218,000197,000180,000
VDSL
(includes naked)
228,000221,000202,000184,000170,000
Fibre broadband
(GPON)
713,000740,000773,000802,000831,000
Data services
(copper)
4,0004,0003,0003,0003,000
Fibre premium
(P2P)
11,00011,00011,00011,00011,000
Total connections
1,419,0001,415,0001,390,0001,369,0001,356,000
Fibre (GPON)
VDSL
Copper ADSL
Unbundled copper
Baseband copper
Fibre comprises 62% of Chorus connections
>1,181,000 broadband connections comprises:
▪831,000 fibre (GPON) connections
▪350,000 VDSL/ADSL (copper) connections
Business premium
Note: 11,000 free education connections are excluded from this data
Q3 FY21 CONNECTIONS UPDATE
4

29,000mass market fibre connections added
▪Consumer 1Gbps connections grew from
136k to 143k and comprise 17% of GPON
connections
▪small business connections grew from 11k
to 24k
▪50Mbps connections are declining and now
comprise ~10% of GPON connections
0
10
20
30
40
50
60
70
80
90
100
Mar-20Jun-20Sep-20Dec-20Mar-21
% of
plans
Total mass market fibre uptake by plan type
50Mbps
100Mbps
1Gbps
15 April 2021
Consumer 1Gbps uptake grew by 7k 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
Q3 FY21 CONNECTIONS UPDATE
5

UFB uptake reaches 64%
>UFB uptake increased from 63% to 64% within
completed footprint in Q3*
▪uptake in UFB1 areas grew from 66% to 68%
▪uptake in UFB2 areas grew from 39% to 40%
▪810,000 connections (Q2: 783,000) now within completed
footprint, including business premium connections
▪1,268,000customers able to connect (Q2: 1,246,000)
▪986,000 premises passed** (Q2: 966,000) out of
1,054,000 target = UFB rollout 94% complete
(note: data includes some UFB2 areas that have been partially built, but not
yet submitted for Crown sign-off)
>40,000 fibre installations completed in Q3 (Q2: 44k)
▪customer satisfaction steady at 8.2
▪WIP steady at ~15k
▪field crews reduced from 689 to 657
* includes ~3k free education connections
**under the UFB contract, a multi-dwelling unit or single office block is one premises
Uptake
15 April 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-20Mar-21
ADSLVDSLFibre
Fibrenow 82% of Chorus broadband
connections in planned UFB zone
No. of
connections
Q3 FY21 CONNECTIONS UPDATE
6

0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Mar-20Jun-20Sep-20Dec-20Mar-21
% uptake
relative to
capable
addresses
UFB1 uptake: 68%
15 April 2021
Average uptake
Q3 FY21 CONNECTIONS UPDATE
7

▪managed migration installations (i.e. ONT only without
active service) reduced in Q3 due to summer holiday
period
▪7k ONT activations
▪3k of activations were at offnet addresses
15 April 2021
Managed migration activity lifts fibre connections
13k installations completed in Q3
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
Q3 FY20Q4 FY20Q1 FY21Q2 FY21Q3 FY21
Managed migration programme
InstallationsConnections
Q3 FY21 CONNECTIONS UPDATE
8

Monthly average data usage on fibre 491 gigabytes
>monthly average data usage per connection on our
network grew to 416GBin March, up from 390GB(Dec)
▪491GBon fibre (Dec:460GB)
▪241GBon copper (Dec:241GB)
>Average peak throughput on our network at peak time
(~9pm) was 2.75Tbps, up from 2.44Tbps in December
2019
15 April 2021
241
491
416
0
50
100
150
200
250
300
350
400
450
500
CopperFibreAverage
Data
usage
(GB)
Monthly average data usage per connection on
our network*
* includes upstream traffic from June 2020 onwards
Q3 FY21 CONNECTIONS UPDATE
9

15 April 2021
Commission report: fibre leads for low latency
▪The Commerce Commission’s Measuring Broadband New Zealand, Summer Report (April 2021) shows fixed line services
outperform fixed wireless significantly on key measures such as download speeds and latency
Q3 FY21 CONNECTIONS UPDATE
Source: Commerce Commission
10