Chorus Q4 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

12 July 2021

Q4 FY21 overview

Total fixed line connections declined by 16k to 1,340,000*
Copper broadband and voice connections declined by 44k (Q3 FY21: -42k)
• fixed wireless providers continued targeted sales campaigns to their fixed line customers
• voice only disconnections increased to 14k (Q3: -11k)

Total broadband connections declined by 1k to 1,180,000* (Q3 FY21: -2k)
• COVID-19 impact on net migration continues to constrain broadband growth below historic rate
• increase of 5k connections in Chorus UFB zone driven by Chorus incentive and migration
campaigns
• market reports indicate smaller retailers continue to grow broadband market share
• Vodafone and Skinny introduced $55 and $50 4G unlimited fixed wireless plans; 5G plans in some
areas

Fibre broadband connections increased by 29k (Q3 FY21: +29k)
• fibre uptake across the completed UFB footprint grew from 64% to 65%
• strongest quarterly fibre growth was in the Queenstown and Wellington-Kapiti regions
• 1Gbps connections increased 14k and are now 19% of GPON connections
• average monthly data usage on fibre increased to 500GB, up from 491GB in March (including
upstream traffic)
• streaming traffic continues to grow with highest June throughput of 2.97Tbps on Queen’s
Birthday

*totals exclude 10,000 broadband connections Chorus is partly subsidising for 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

---

Q4 FY21 Connections Update
12 July 2021
Q4 FY21 CONNECTIONS UPDATE

>Copper broadband and voice connections declined by 44k (Q3 FY21: -42k)
▪fixed wireless providers continued targeted sales campaigns to their fixed line customers
▪voice only disconnections increased to 14k (Q3: -11k)
>Total broadband connections reduced 1k to 1,180,000* (Q3 FY21: -2k)
▪COVID-19 impact on net migration continues to constrain broadband growth below historic rate
▪increase of 5k connections in Chorus UFB zone driven by Chorus incentive and migration campaigns
▪market reports indicate smaller retailers continue to grow broadband market share
▪Vodafone and Skinny introduced $55 and $50 4G unlimited fixed wireless plans; 5G plans in some areas
>Fibre broadband connections increased by 29k (Q3 FY21: +29k)
▪fibre uptake across the completed UFB footprint grew from 64% to 65%
▪strongest quarterly fibre growth was in the Queenstown and Wellington-Kapiti regions
▪1Gbps connections increased 14k and are now 19% of GPON connections
▪average monthly data usage on fibre increased to 500GB, up from 491GB in March (including upstream traffic)
▪streaming traffic continues to grow with highest June throughput of 2.97Tbps on Queen’s Birthday
*totals exclude ~10,000 broadband connections Chorus is partly subsidising for student households
12 July 2021
Q4 FY21 overview
Total fixed line connections declined by 16k to 1,340,000* (Q3 FY21: -13k)
Q4 FY21 CONNECTIONS UPDATE
2

12 July 2021
Connection changes by Zone (indicative)
Chorus UFB
zone*
Non-UFB
zone
Local Fibre
Company
UFB zone
Total connections at
30 June**
1,069,000185,00073,000
Broadband connections985,000150,00045,000
Copper (no broadband)
connections
84,00035,00028,000
* Includes planned Chorus UFB1, 2 and 2+ coverage
**Excludes 13k fibre premium and data services (copper) connections
5
6
-4
-2
8
-1
-2
-2
-5
-6
-6
-9
-4
-10
-8
-7
-8
-5
-2
-1
-1
-1
-1
-2
-2
-3
-2
-2
-15-5515
Q4 FY21
Q3 FY21
Q2 FY21
Q1 FY21
Q4 FY20
Q4 FY21
Q3 FY21
Q2 FY21
Q1 FY21
Q4 FY20
Q4 FY21
Q3 FY21
Q2 FY21
Q1 FY21
Q4 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: continued broadband growth driven by
Chorus incentives and migration campaigns. Increased rate of
copper voice disconnections reflects targeted fixed wireless
sales campaigns.
>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
Q4 FY21 CONNECTIONS UPDATE
3

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
30-Jun-2030-Sep-2031-Dec-2031-Mar-2130-Jun-21
12 July 2021
30 June
2020
30 Sept
2020
31 Dec
2020
31 March
2021
30 June
2021
Unbundled copper
(no broadband)
15,00014,00013,00011,00010,000
Baseband copper
(no broadband)
179,000169,000159,000150,000137,000
Copper ADSL
(includes naked)
245,000218,000197,000180,000163,000
VDSL
(includes naked)
221,000202,000184,000170,000157,000
Fibre broadband
(GPON)
740,000773,000802,000831,000860,000
Data services
(copper)
4,0003,0003,0003,0002,000
Fibre premium
(P2P)
11,00011,00011,00011,00011,000
Total connections
1,415,0001,390,0001,369,0001,356,0001,340,000
Fibre (GPON)
VDSL
Copper ADSL
Unbundled copper
Baseband copper
Fibre comprises 65% of Chorus connections
>1,180,000 broadband connections comprises:
▪860,000 fibre (GPON) connections
▪320,000 VDSL/ADSL (copper) connections
Business premium
Note: 10,000 partly subsidisededucation connections are excluded
from this data
Q4 FY21 CONNECTIONS UPDATE
4

0
10
20
30
40
50
60
70
80
90
100
Jun-20Sep-20Dec-20Mar-21Jun-21
% of
plans
Total mass market fibre uptake by plan type*
50Mbps
100Mbps
1Gbps
12 July 2021
1Gbps uptake grew by 14k connections to 19%
200Mbps
Small 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
Q4 FY21 CONNECTIONS UPDATE
5
>29,000 mass market fibre connections added
▪1Gbps connections grew from 152k (including
business) to 166k and comprise 19% of GPON
connections
▪small business connections grew from 24k to 26k
▪50Mbps connections reduced to 9% of GPON
connections
>consumer pricing/CPI changes from 1 October
2021
▪1Gbps –no change
▪200Mbps –reducing to $56.00
▪100Mbps –increasing to $47.87
▪50Mbps –increasing to $44.22
*excludes ~6k secondary and voice connections

UFB uptake reaches 65%
>UFB uptake increased from 64% to 65% within
completed footprint in Q4*
▪uptake in UFB1 areas grew from 68% to 69%
▪uptake in UFB2 areas grew from 40% to 42%
▪837,000 connections (Q3: 810,000) now within completed
footprint, including business premium connections
▪1,282,000customers able to connect (Q3: 1,268,000)
▪999,000 premises passed** (Q3: 986,000) out of
1,054,000 target = UFB rollout 95% complete
(note: data includes some UFB2 areas that have been partially built, but not
yet submitted for Crown sign-off)
>41,000 fibre installations completed in Q4 (Q3: 40k)
▪customer satisfaction steady at 8.2
▪WIP reduced to 13k from ~15k
▪field crews remained steady ~650
* includes ~3k partly subsidised education connections
**under the UFB contract, a multi-dwelling unit or single office block is one premises
Uptake
12 July 2021
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
ADSLVDSLFibre
Fibrenow 84% of Chorus broadband
connections in planned UFB zone
No. of
connections
Q4 FY21 CONNECTIONS UPDATE
6

0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
Jun-20Sep-20Dec-20Mar-21Jun-21
% uptake
relative to
capable
addresses
UFB1 uptake: 69%
12 July 2021
Average uptake
Q4 FY21 CONNECTIONS UPDATE
7

>strongest quarter yet for managed migration installations
(i.e. ONT only without active service)
▪8k ONT activations
▪~4k activations were at offnet addresses
12 July 2021
Managed migration activity lifts fibre connections
16k installations completed in Q4
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Q1 FY21Q2 FY21Q3 FY21Q4
Managed migration programme
InstallationsConnections
Q4 FY21 CONNECTIONS UPDATE
8

Monthly average data usage on fibre 500 gigabytes
>monthly average data usage per connection on our
network grew to 432GBin June, up from 416GB(March)
▪500GBon fibre (March:491GB)
▪254GBon copper (March:241GB)
>Average peak throughput on our network at peak time
(~9pm) was 2.81Tbps in June, up from 2.75Tbps in
March
▪highest peak of 2.97Tbps on Queen’s Birthday
12 July 2021
254
500
432
0
100
200
300
400
500
CopperFibreAverage
Data
usage
(GB)
Monthly average data usage per connection on
our network*
* includes upstream traffic from June 2020 onwards
Q4 FY21 CONNECTIONS UPDATE
9

12 July 2021
Commerce Commission broadband testing report
▪The Commerce Commission’s Measuring Broadband New Zealand, Autumn Report (June 2021) continues to show fixed
line services outperform fixed wireless significantly on key measures such as download speeds and latency
Q4 FY21 CONNECTIONS UPDATE
Source: Commerce Commission
10