Chorus Q4 FY23 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 July 2023

Q4 FY23 overview

Update on flood and cyclone-related costs
• As noted at Chorus’ HY23 results, FY23 EBITDA guidance of $675m-$690m excluded potential
flood and cyclone-related impacts. These FY23 EBITDA impacts are estimated to be $7m and
exclude future capital expenditure, where required, for network replacement.

Total fibre connections increased by 19k to 1,031,000 (Q3 FY23: +15k)
• Fibre uptake increased from 72% to 73% across the completed UFB footprint in Q4
o 77% uptake (+1%) in UFB1 areas
o 56.5% uptake (+2.5%) in UFB2 areas
Total broadband connections remained steady at 1,188,000*
• 7k broadband connections were added in Chorus UFB areas (Q3 FY23: +6k)
• 1Gbps and Hyperfibre connections were 44% of net mass market fibre adds in Q4 (Q3 FY23:
46%)
• Home Fibre Starter (50Mbps) connections grew 58% to 16k
Total fixed line connections declined by 8k to 1,271,000* (Q3 FY23: -6k)
• copper broadband and voice connections declined by 27k (Q3 FY23: -21k)
• voice only disconnections were -8k (Q3 FY23: -5k)
• copper withdrawal: 544 copper broadband cabinets no longer have active customers (Q3
FY23: 330 cabinets)
Average monthly data usage increased to 542GB in June (March: 502GB)
• Average fibre data usage grew to 585GB in June (March: 548GB)
• Gisborne had the highest regional data usage at 665GB on fibre, likely reflecting ongoing
weather and access challenges
*totals exclude ~2,000 broadband connections Chorus is partly subsidising for student households
Authorised by:
Mark Aue
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
Mobile: +64 (27) 488 7808
Email: Brett.Jackson@chorus.co.nz

---

Q4 FY23 Connections Update
11 July 2023

>Update on flood and cyclone-related costs
▪As noted at Chorus’ HY23 results, FY23 EBITDA guidance of $675m-$690m excluded potential flood and cyclone-related
impacts. These FY23 EBITDA impacts are estimated to be $7m and exclude future capital expenditure, where required,
for network replacement.
>Total fibre connections increased by 19k to 1,031,000 (Q3 FY23: +15k)
▪Fibre uptake increased from 72% to 73% across the completed UFB footprint in Q4
•77% uptake (+1%) in UFB1 areas
•56.5% uptake (+2.5%) in UFB2 areas
>Total broadband connections remained steady at 1,188,000*
▪7k broadband connections were added in Chorus UFB areas (Q3 FY23: +6k)
▪1Gbps and Hyperfibreconnections were 44% of net mass market fibre adds in Q4 (Q3 FY23: 46%)
▪Home Fibre Starter (50Mbps) connections grew 58% to 16k
>Total fixed line connections declined by 8k to 1,271,000* (Q3 FY23: -6k)
▪copper broadband and voice connections declined by 27k (Q3 FY23: -21k)
▪voice only disconnections were-8k(Q3 FY23: -5k)
▪copper withdrawal: 544copper broadband cabinets no longer have active customers (Q3 FY23: 330 cabinets)
>Average monthly data usage increased to 542GB in June (March: 502GB)
▪Average fibre data usage grew to 585GB in June (March: 548GB)
▪Gisborne had the highest regional data usage at 665GB on fibre, likely reflecting ongoing weather and access challenges
11 July 2023
Q4 FY23 overview
*totals exclude ~2,000 broadband
connections Chorus is partly subsidising
for student households
2

>Total uptake of 73% within completed UFB footprint in Q4 vs
72% in Q3
▪uptake in UFB1 areas grew from 76% to 77%
▪uptake in UFB2 areas grew from 54% to 56.5%
▪985,000 connections (Q3 FY23: 968,000) now within completed
footprint (includes business premium and partly subsidised
education connections)
>25,000fibre installations completed in Q4 (Q3 FY23: 19k)
▪WIP reduced from 13k in March to 10k in June
▪customer satisfaction reduced from 7.6 to 7.4, reflecting workforce
constraints in prior periods
Uptake grew to 73% within completed UFB zone
Uptake
11 July 2023
66
69
72
74
75.5
77
39
42
46
50
52
56.5
63
65
67
69
71
73
35
40
45
50
55
60
65
70
75
80
HY21FY21HY22FY22HY23FY23
Chorus fibre uptake
(% uptake vs UFB addresses)
UFB1UFB2Total (average)
3

>Home Fibre Starter (50Mbps) connections grew 58% to 16k with large retailers now offering $50 plans
>91% of residential and business connections are on plans of 300Mbps and above
>1Gbps and Hyperfibreconnections were 44% of net mass market fibre adds (Q3 FY23: 46%)
>CPI increase of 6.65% (or, if lower, the June quarter CPI) will be applied to most fibre plans –excluding Home Fibre
Starter, Hyperfibreand Small Business Fibre Max plans –from 1 October
11 July 2023
Mass market fibre connections grew 19k
0
20,000
40,000
60,000
80,000
100,000
120,000
June 2022Sept 2022Dec 2022March 2023June 2023
Business
2Gbps+1Gbps500Mbps300Mbps200Mbps100Mbps<100MbpsVoice
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
June 2022Sept 2022Dec 2022March 2023June 2023
Residential
2Gbps+1Gbps300Mbps100Mbps<100MbpsVoice
4

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
30-Jun-2230-Sep-2231-Dec-2231-Mar-2330-Jun-23
11 July 2023
30 June
2022
30 Sept
2022
31 Dec
2022
31 March
2023
30 June
2023
Unbundled copper
(no broadband)
1,0001,000not
material
not
material
not
material
Baseband copper
(no broadband)
102,00094,00085,00080,00072,000
Copper ADSL
(includes naked)
122,000112,000102,00094,00084,000
VDSL
(includes naked)
118,000109,000100,00092,00083,000
Fibre broadband
(GPON)
949,000969,000986,0001,002,0001,021,000
Data services
(copper)
2,0001,0001,0001,0001,000
Fibre premium
(P2P)
10,00011,00011,00010,00010,000
Total connections
1,304,0001,297,0001,285,0001,279,0001,271,000
Fibre (GPON)
VDSL
Copper ADSL
Baseband copper
Fibre comprises 81% of Chorus connections
>1,188,000 broadband connections comprises:
▪1,021,000 fibre (GPON) connections
▪167,000 VDSL/ADSL (copper) connections
Business premium
Note: ~2,000 partly subsidisededucation connections are excluded from this data
5

11 July 2023
Connection changes by Zone (indicative as at30 June)
* Excludes ~2k partly subsidised education connections and 11k fibre premium and data services (copper) connections
7
6
3
6
4
-5
-4
-2
-2
-3
-2
-2
-3
-3
-2
-6
-2
-6
-6
-8
-1
-2
-2
-1
-2
-1
-1
-2
-1
-2
-10-50510
Q4 FY23
Q3 FY23
Q2 FY23
Q1 FY23
Q4 FY22
Q4 FY23
Q3 FY23
Q2 FY23
Q1 FY23
Q4 FY22
Q4 FY23
Q3 FY23
Q2 FY23
Q1 FY23
Q4 FY22
Broadband connections
Copper (no broadband) connections
Quarterly change (’000s) by zone*
Other fibre
company (LFC)
zone
Broadband connections25,000Local Fibre Company and fixed wireless provider
activity is driving a gradual decline in copper
connections.
Copper line (no broadband)14,000
TOTAL39,000
Non-UFB zoneBroadband connections129,000Ongoing decline in copper connections due to
mobile/fixed wireless/satellite footprint
expansion. Partly offset by fibre connections
growth for greenfield developments.
Copper line (no broadband)23,000
TOTAL152,000
Chorus UFB zoneBroadband connections1,034,000Chorus copper withdrawal programme resumed
after a pause in Q3 following Cyclone Gabrielle.
Increase in technician workforce enabled a
resumption of proactive fibre migration activity.
Copper line (no broadband)35,000
TOTAL1,069,000
6

11 July 2023
Copper withdrawal programme
>~30,000 initial withdrawal notifications issued (cumulative)
▪copper service ceased for ~22,000 notified connections
▪544 copper broadband cabinets now closed; withdrawal notices
issued across another 773
▪broadband retention rate of 88% across closed cabinets (Q3: 88%)
>managed migration initiatives: activation of installed fibre
sockets (ONTs)
▪~8k sockets activated in Q3 (Q3 FY23: ~7k)
▪52% of activations were offnet addresses (Q3 FY23: 50%)
544
773
1,641
Copper broadband cabinets –Chorus
UFB area
Closed
Notified
In service
7

Monthly average data usage on fibre 585gigabytes
>Monthly average data usage increased in June
▪585GBon fibre (March:548GB)
▪279GBon copper (March:260GB)
▪542GBaverage across all connections
(March:502GB)
>Gisborne had the highest regional data usage with an
average of 665GB on fibre in June, likely reflecting
increased reliance on broadband connectivity given
ongoing weather and access issues
>Average peak throughput on our network at peak time
(~9pm) was 3.5Tbps, up from 3.3Tbps in March
▪a single day peak of 4.39Tbps coincided with a
Fortnite update on 9 June
11 July 2023
279
585
542
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
8

11 July 20239
Measuring Broadband NZ, Autumn Report 2023
▪Commerce Commission reporting continues to highlight the strong performance of fibre relative to other technologies.

MBNZ, Autumn Report 2023 (cont.)
11 July 202310