Chorus Q2 FY22 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

21 January 2022

Q2 FY22 overview

Total fibre connections increased by 24k to 918,000 (Q1 FY22: +23k)

Fibre uptake across the completed UFB footprint grew from 66% to 67%
• fibre broadband connections increased by 24k despite ongoing effects of COVID alert levels on
our migration programme and Q2 typically being a softer period for demand (e.g. student
holidays)
• uptake reached 72% (+1%) in UFB1 areas and 46% (+2%) in UFB2 areas
• the fibre rollout was recently completed in Mahurangi, Russell, Duvauchelle and Fairlie

Total broadband connections increased 4k to 1,187,000* (Q1 FY22: +3k)
• 9k connections were added in Chorus UFB areas
• strong demand for high quality broadband saw 1Gbps uptake grow to 23% (Q1 FY22: 20%) of
mass market fibre connections
• more than half a million consumer plans were upgraded from 100Mbps to 300Mbps in December
and Ookla Global Speedtest Index results show NZ has jumped from 22
nd
to 11
th
in the world with
median download speeds of 122Mbps (note: this result was from mid-December and is expected
to improve once the full effect of the upgrade is measured)

Copper broadband and voice connections declined by 30k (Q1 FY22: -32k)
• voice only disconnections slowed slightly to 10k (Q1 FY22: -12k)
• total fixed line connections declined by 6k to 1,325,000* (Q1 FY22: -9k)

Average monthly data usage was 479GB in December (Sept: 539GB) reflecting the end of COVID
lockdowns and the start of the summer holiday period
• average monthly data usage on fibre was 554GB vs 621GB in September


*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

---

Q2 FY22 Connections Update
21 January 2022
Q2 FY22 CONNECTIONS UPDATE

>Fibre uptake across the completed UFB footprint grew from 66% to 67%
▪fibre broadband connections increased by 24k despite ongoing effects of COVID alert levels on our migration programme
and Q2 typically being a softer period for demand (e.g. student holidays)
▪uptake reached 72% (+1%) in UFB1 areas and 46% (+2%) in UFB2 areas
▪the fibre rollout was recently completed in Mahurangi, Russell, Duvauchelleand Fairlie
>Total broadband connections increased 4k to 1,187,000* (Q1 FY22: +3k)
▪9k connections were added in Chorus UFB areas
▪strong demand for high quality broadband saw 1Gbps uptake grow to 23% (Q1 FY22: 20%) of mass market fibre
connections
▪more than half a million consumer plans were upgraded from 100Mbps to 300Mbps in December and OoklaGlobal
SpeedtestIndex results show NZ has jumped from 22
nd
to 11
th
in the world with median download speeds of 122Mbps
(note: this result was from mid-December and is expected to improve once the full effect of the upgrade is measured)
>Copper broadband and voice connections declined by 30k (Q1 FY22: -32k)
▪voice only disconnections slowed slightly to 10k (Q1 FY22: -12k)
▪total fixed line connections declined by 6k to 1,325,000* (Q1 FY22: -9k)
>Average monthly data usage was 479GB in December (Sept: 539GB) reflecting the end of COVID lockdowns
and the start of the summer holiday period
▪average monthly data usage on fibre was 554GB vs 621GB in September
21 January 2022
Q2 FY22 overview
Total fibre connections increased by 24k to 918,000 (Q1 FY22: +23k)
Q2 FY22 CONNECTIONS UPDATE
2
*totals exclude ~10,000 broadband
connections Chorus is partly subsidising
for student households

21 January 2022
Connection changes by Zone (indicative as at 31 December)
* Includes planned Chorus UFB1, 2 and 2+ coverage
**Excludes 10k partly subsidised education connections and 13k fibre premium and data services (copper) connections
9
7
5
6
-4
-2
-1
-1
-2
-3
-3
-5
-6
-6
-6
-8
-10
-8
-7
-2
-1
-2
-1
-1
-2
-3
-2
-2
-3
-15-5515
Q2 FY22
Q1 FY22
Q4 FY21
Q3 FY21
Q2 FY21
Q2 FY22
Q1 FY22
Q4 FY21
Q3 FY21
Q2 FY21
Q2 FY22
Q1 FY22
Q4 FY21
Q3 FY21
Q2 FY21
Broadband connections
Copper (no broadband) connections
Quarterly change (’000s) by zone**
Q2 FY22 CONNECTIONS UPDATE
3
Other fibre
company (LFC)
zone
Broadband connections39,000Disconnections continue due to Local Fibre
Company and fixed wireless provider activity,
with some slowdown due to COVID-19 effects.
Copper line (no broadband)23,000
TOTAL62,000
Non-UFB zoneBroadband connections147,000Some expansion of wireless broadband footprint
through Government backed programme. New
housing outside of UFB zone driving fibre
premises growth.
Copper line (no broadband)32,000
TOTAL179,000
Chorus UFB zone*Broadband connections1,001,000Continued broadband growth driven by Chorus
incentives and migration campaigns. Copper
voice disconnections reflect migration to fibre
and targeted fixed wireless activities.
Copper line (no broadband)70,000
TOTAL1,071,000

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
31-Dec-2031-Mar-2130-Jun-2130-Sep-2131-Dec-21
21 January 2022
31 Dec
2020
31 March
2021
30 June
2021
30 Sept
2021
31 Dec
2021
Unbundled copper
(no broadband)
13,00011,00010,0008,0006,000
Baseband copper
(no broadband)
159,000150,000137,000127,000119,000
Copper ADSL
(includes naked)
197,000180,000163,000152,000142,000
VDSL
(includes naked)
184,000170,000157,000148,000138,000
Fibre broadband
(GPON)
802,000831,000860,000883,000907,000
Data services
(copper)
3,0003,0002,0002,0002,000
Fibre premium
(P2P)
11,00011,00011,00011,00011,000
Total connections
1,369,0001,356,0001,340,0001,331,0001,325,000
Fibre (GPON)
VDSL
Copper ADSL
Unbundled copper
Baseband copper
Fibre comprises 69% of Chorus connections
>1,187,000 broadband connections comprises:
▪907,000 fibre (GPON) connections
▪280,000 VDSL/ADSL (copper) connections
Business premium
Note: 10,000 partly subsidisededucation connections are excluded from this data
Q2 FY22 CONNECTIONS UPDATE
4

21 January 2022
Q2 FY22 CONNECTIONS UPDATE
5
1 Gigabit plans now 23% of mass market
More than half a million customers upgraded to 300Mbps plans in December
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
June 2021Sept 2021Dec 2021
Residential
1Gbps300Mbps200Mbps
100Mbps50MbpsVoice
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
June 2021Sept 2021Dec 2021
Business
1Gbps500Mbps300Mbps200Mbps
100Mbps<100MbpsVoice

UFB uptake grows to 67%
>UFB uptake increased from 66% to 67% within completed
footprint in Q2*
▪uptake in UFB1 areas grew from 71% to 72%
▪uptake in UFB2 areas grew from 44% to 46%
▪881,000 connections (Q1 FY22: 858,000) now within
completed footprint, including business premium connections
▪1,308,000customers able to connect (Q1 FY22: 1,295,000)
▪1,022,000 premises passed** (Q1 FY22: 1,011,000) out of
1,054,000 target = UFB rollout 97% complete
(note: data includes some UFB2 areas that have been partially built, but not yet submitted
for Crown sign-off)
>34,000 fibre installations completed in Q2 (Q1 FY22: 30k)
▪customer satisfaction remained steady at 8.3
▪WIP reduced from 15k to ~13k
▪field crews reduced from ~650 to ~600
* includes ~3k partly subsidised education connections
**under the UFB contract, a multi-dwelling unit or single office block is one premises
Uptake
21 January 2022
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Dec-20Mar-21Jun-21Sep-21Dec-21
ADSLVDSLFibre
Fibrenow 87% of Chorus broadband
connections in planned UFB zone
No. of
connections
Q2 FY22 CONNECTIONS UPDATE
6

0.00%
10.00%
20.00%
30.00%
40.00%
50.00%
60.00%
70.00%
80.00%
90.00%
Dec-20Mar-21Jun-21Sep-21Dec-21
% uptake
relative to
capable
addresses
UFB1 uptake: 72%
21 January 2022
Average uptake
7
Q2 FY22 CONNECTIONS UPDATE

>Installation activity was consistent with Q1, reflecting the
ongoing effect of heightened COVID alert levels on some
consumer facing activity
▪activations of installed fibre sockets (ONTs) increased
from ~7k in Q1 to 8k in Q2
▪~4k activations were at offnet addresses
21 January 2022
Managed migration programme lifts uptake
~11k managed migration installations completed in Q2 (Q1 FY22: 12k)
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Q2 FY21Q3 FY21Q4 FY21Q1 FY22Q2 FY22
Managed migration programme
InstallationsConnections
Q2 FY22 CONNECTIONS UPDATE
8

Monthly average data usage on fibre 554gigabytes
>Monthly data usage reduced with the end of COVID
lockdowns and the start of the summer holiday period
▪554GBon fibre (Sept:621GB)
▪273GBon copper (Sept:297GB)
▪479GBaverage (Sept:539GB)
>Average peak throughput on our network at peak time
(~9pm) was 2.9Tbps in December, down from 3.34Tbps
in Sept
21 January 2022
273
554
479
0
100
200
300
400
500
600
CopperFibreAverage
Data
usage
(GB)
Monthly average data usage per connection on
our network*
* includes upstream traffic from June 2020 onwards
Q2 FY22 CONNECTIONS UPDATE
9

21 January 2022
Q2 FY22 CONNECTIONS UPDATE
10
Report confirms fibre’s low emissions benefits
SapereResearch Group finds fibre outperforms other technologies
>The research found:
▪fibre’s carbon emissions profile stays consistent as broadband
speeds increase, while emissions increase for other broadband
technologies
▪at 300Mbps, per-user emissions of 5G fixed wireless are about four
to five times higher than those of fibre GPON
▪equipment in the home contributes up to 65% of fibre broadband
emissions and offers an opportunity for future reductions, including
through uptake of Hyperfibreservices on new XGS-PON technology
Note: the research was commissioned by New Zealand fibre network companies including
Chorus. It examined the emissions during the access network use and includes the
shipping and disposal of equipment, such as optical network terminals and Wi-Fi routers
but not the activity in building copper, fibre, HFC or the mobile networks. Real-world
network data was used to assess the emissions impact of fibre and VDSL while a mix of
actual and theoretical data was used for other technologies.
Chart: Emissions in Fibre (GPON) and Fixed Wireless Access (FWA)
4G/5G networks for average access rates between 50 and 500Mbps

21 January 2022
Commerce Commission broadband testing report
▪The Commerce Commission’s Measuring Broadband New Zealand, Spring Report (December 2021) shows latency is a
key area in which fibre outperforms other technologies. Particularly when the broadband connection is heavily utilised.
Q2 FY22 CONNECTIONS UPDATE
Source: Commerce Commission
11