Chorus Q1 FY24 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

17 October 2023

Q1 FY24 Connections Update

Chorus today released its connections update for the Q1 period to 30 September.
The results show steady growth in fibre connections, up 19,000 to 1,051,000.
1


The entry level 50Mbps Home Fibre Starter service grew strongly, up 7,000 connections
in the quarter following mainstream advertising campaigns by larger retailers. The
50Mbps service now comprises 2% of Chorus’ residential fibre connections. Demand for
1Gbps and Hyperfibre services remains strong and made up 36% of net adds in the
quarter.

Fibre growth more than offset ongoing reductions in copper broadband connections and
total broadband connections increased by 1,000 to 1,191,000
2
. Copper voice lines
reduced by 8,000 in the quarter and this drove an overall reduction in fixed line
connections to 1,266,000
3
, down from 1,271,000 connections in June.

Chorus’ copper withdrawal programme continues to gain momentum in those areas
where fibre is available. Copper services have now ceased for about 29,000 notified
connections, up 7,000 in the quarter, and more than 660 copper broadband cabinets
have now been closed. Outside of fibre areas, the ongoing migration of consumers to
alternative wireless and satellite networks saw copper connections reduce by 6,000
connections to 106,000.

Fibre uptake – updated footprint

Chorus has updated its fibre uptake reporting to better reflect new housing growth
beyond the original UFB footprint and align it more closely with the regulatory regime for
fibre services. Fibre uptake is now reported based on all current addresses, excluding
those in other local fibre company (LFC) areas, that have been passed by Chorus fibre.
Prior uptake reporting was linked to a smaller footprint defined by the ultra-fast
broadband (UFB) rollout contract requirements with government and this rollout finished
in December 2022.

Chorus’ updated measurement means Chorus’ wider fibre footprint, excluding LFC areas,
was about 1,486,000 addresses as at 30 September. Fibre uptake grew by 0.8% to
70.2% in the quarter based on connections of 1,043,000. The number of addresses

1
This total now includes ~1,000 partly subsidised fibre connections for students.
2
This total now includes ~1,000 partly subsidised fibre and ~1,000 partly subsidised copper broadband
connections for students.
3
This total now includes ~1,000 partly subsidised fibre and ~1,000 partly subsidised copper broadband
connections for students.

connected to fibre in this footprint grew by about 18,000, while the number of addresses
that had fibre available at the boundary grew by 9,000. There were 252,000 addresses
passed by fibre that did not yet have fibre installed into the address.

Chorus has also updated its fibre uptake measure for cities to include all current
addresses that have fibre available within the “urban area”, as defined by Statistics NZ.
This new measure better reflects housing growth and the expansion of Chorus’ fibre
network beyond the original UFB rollout area in major cities. The inclusion of recent
address growth and the larger urban footprint saw fibre uptake in the Auckland area
increase 0.4% to 76.3% in the quarter to 30 September. Uptake in Dunedin and
Wellington was 76.1% and 70.5% respectively.

Broadband performance

Monthly data usage on fibre was flat at 585 gigabytes (GB) in September compared to
June. Consumers on 50Mbps plans averaged about 260GB of data in September,
compared to 480GB for those on 300Mbps plans and 940GB for those on 1Gbps plans.

The Commerce Commission’s recent Measuring Broadband New Zealand Winter Report
continues to highlight the leading reliability and capability of fibre relative to alternative
technologies such as satellite and fixed wireless. While some of these services can
achieve broadband speeds on a par with lower-speed fibre plans, none are fibre-like
when essential characteristics such as stability and latency are measured.

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

---

Q1 FY24 Connections Update
17 October 2023
Q1 FY24 CONNECTIONS UPDATE

>Fibre connections (including non-address points and LFC areas) increased 19k (Q4 FY23: +19k) and now total
1,051,000*
>Chorus’ fibre footprint now covers 1,486,000 addresses (excluding LFC areas)
▪fibre passed another 9,000 addresses in Q1
▪overall fibre uptake grew 0.8% to 70.2% in Q1 (Q4 FY23: +0.9%)
▪Auckland +0.4%; Wellington +0.6%; Dunedin +0.4%
>Broadband connections increased 1k and now total to 1,191,000*
▪~18k fibre broadband connections were added in Chorus fibre areas
▪1Gbps and Hyperfibreconnections were 36% of net mass market fibre adds in Q1 (Q4 FY23: 44%)
▪Home Fibre Starter (50Mbps) connections grew 7k to 23k
>Total fixed line connections declined by 7k(Q4 FY23: -8k) and now total 1,266,000*
▪copper broadband and voice connections declined by 25k (Q4 FY23: -27k)
▪voice only disconnections were -8k (Q4 FY23: -8k)
▪copper withdrawal: 663copper broadband cabinets no longer have active customers (Q4 FY23: 544 cabinets)
>Average monthly data usage on fibre was flat at 585GB in September vs June
▪1Gbps consumers average 940GB vs 480GB for 300Mbps consumers
17 October 2023
Q1 FY24 overview
*FY24 totals now include ~1,000 fibre and ~1,000 copper DSL broadband connections Chorus is partly subsidising for student households
Q1 FY24 CONNECTIONS UPDATE
2

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
30-Sep-2231-Dec-2231-Mar-2330-Jun-2330-Sep-23
17 October 2023
30 Sept
2022
31 Dec
2022
31 March
2023
30 June
2023
30 Sept
2023
Unbundled copper
(no broadband)
1,000not
material
not
material
not
material
not
material
Baseband copper
(no broadband)
94,00085,00080,00072,00064,000
Copper ADSL
(includes naked)
112,000102,00094,00084,00075,000
VDSL
(includes naked)
109,000100,00092,00083,00075,000
Fibre broadband
(GPON)
969,000986,0001,002,0001,021,0001,041,000
Data services
(copper)
1,0001,0001,0001,0001,000
Fibre premium (P2P)11,00011,00010,00010,00010,000
Total connections
1,297,0001,285,0001,279,0001,271,0001,266,000*
Fibre (GPON)
VDSL
Copper ADSL
Baseband copper
>1,191,000* broadband connections comprises:
▪1,041,000 fibre (GPON) connections
▪150,000 VDSL/ADSL (copper) connections
Business premium
* Now includes 1k DSL and 1k GPON partly subsidisededucation connections that were previously excluded from broadband totals
Q1 FY24 CONNECTIONS UPDATE
3
Fibrecomprises 83% of Chorus connections

17 October 2023
Q1 FY24 CONNECTIONS UPDATE
Fibre available to 1.48m addresses; 70% uptake
▪70.2%fibre uptake across
1,486,000 passed addresses*
ouptake +0.8% in Q1
o1,043,000 active fibre
connections** (+18k in Q1)
o+9,000 addresses passed in Q1
▪1,234,000fibre installed addresses
o27,000installations completed in Q1
o252,000addresses passed by fibre,
but fibre socket not yet installed
65.0
66.0
67.0
68.0
69.0
70.0
71.0
0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
1,600,000
30-Jun-2230-Sep-2231-Dec-2231-Mar-2330-Jun-2330-Sep-23
Fibre connectedInactive fibre sockets***
Fibre socket not yet installedFibre uptake (%)
%
*based on independent address data and Chorus network data for addresses passed by fibre; excludes Chorus fibre in LFC areas
** includes ~7k fibre premium connections to addresses; excludes smart location (GPON) connections and connections in LFC areas
*** not active on 30 September 2023
4

17 October 2023
Q1 FY24 CONNECTIONS UPDATE
Uptake by city
50
55
60
65
70
75
80
AucklandDunedinWellington
Uptake, by urban area, for fibre passed
addresses
Sep-22Dec-22Mar-23Jun-23Sep-23
Uptake
(%)
5
>Uptake now measured across wider “urban area”
as defined by Statistics NZ, rather than original
UFB rollout area
▪Aucklandachieved 76.3% uptake; up 0.4% in Q1
despite ongoing address growth
▪Dunedingrew 0.4% to 76.1%
▪Wellingtongrew 0.6% to 70.5%

17 October 2023
Connection changes by Zone (indicative as at 30 Sept*)
* Excludes ~13k fibre premium and data services (copper) and smart location connections
-5
-6
-3
-1
-1
-1
-1
-1
-1
-10
-11
-9
-5
-6
-5
-2
-2
-2
18
19
16
0
0
-20020
Q1 FY24
Q4 FY23
Q3 FY23
Q1 FY24
Q4 FY23
Q3 FY23
Q1 FY24
Q4 FY23
Q3 FY23
Copper line only
Copper broadband
Fibre broadband
Quarterly change (’000s) by zone
Q1 FY24 CONNECTIONS UPDATE
Other fibre
company (LFC)
zone
Copper lines (no broadband)12,000Local Fibre Company and fixed wireless provider
activity is driving a gradual decline in copper
connections.
Copper broadband lines17,000
Fibre broadband lines (GPON)3,000
TOTAL32,000
Non-fibre
addresses (i.e.
Chorus fibre not
available)
Copper lines (no broadband)21,000Ongoing decline in copper connections due to
mobile/fixed wireless/satellite footprint
expansion.
Copper broadband lines85,000
TOTAL106,000
Chorus fibre zoneCopper lines (no broadband)31,000Covers all addresses outside of LFC UFB rollout
zone where Chorus fibre is available. Fibre
footprint is growing as a result of new property
development. Copper connections are reducing
as Chorus retires its copper network.
Copper broadband lines48,000
Fibre broadband lines (GPON)1,036,000
TOTAL1,115,000
6

>Home Fibre Starter (50Mbps) connections grew from 16k to 23k
>1Gbps and Hyperfibreconnections were 36% of net mass market fibre adds (Q4 FY23:44%)
>91% of connections are on300Mbps or more
17 October 2023
Mass market fibre connections
0
20,000
40,000
60,000
80,000
100,000
120,000
Sept 2022Dec 2022March 2023June 2023Sep-23
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
Sept 2022Dec 2022March 2023June 2023Sep-23
Residential
2Gbps+1Gbps300Mbps100Mbps<100MbpsVoice
Q1 FY24 CONNECTIONS UPDATE
7

17 October 2023
Copper withdrawal programme
>~34,000 initial withdrawal notifications issued (cumulative)
▪copper service ceased for ~29,000 notified connections
▪663 copper broadband cabinets now closed (Q4 FY23: 544)
▪broadband retention rate of 83% across closed cabinets (Q4:88%)
>managed migration initiatives: activation of installed fibre
sockets (ONTs)
▪~8k sockets activated in Q1 (Q4 FY23: ~8k)
▪54% of activations were offnet addresses (Q4 FY23: 52%)
663
1063
2,119
Copper broadband cabinets –Chorus
UFB area
Closed
Notified
In service
Q1 FY24 CONNECTIONS UPDATE
8

Monthly average data usage on fibre 585gigabytes
>monthly average data usage on fibre was flat at 585GB
in Sept vs June
>copper usage reduced slightly from 279GB (June) to
273GB (Sept)
>consumers on fast fibre plans use, on average,
significantly more data than those on lower speed plans
17 October 2023
273
585
0
100
200
300
400
500
600
Dec-19
Mar-20
Jun-20*
Sep-20*
Dec 20*
Mar 21*
Jun 21*
Sep-21*
Dec 21*
Mar-22*
Jun-22*
Sep-22*
Dec 22*
Mar-23*
June 23*
Sept-23*
CopperFibre
Data
usage
(GB)
Monthly average data usage per connection*
* includes upstream traffic from June 2020 onwards
Q1 FY24 CONNECTIONS UPDATE
0
500
1,000
1,500
2,000
2,500
3,000
3,500
Hyperfibre
(2,4,8 Gbps)
Fibre Max
(1Gbps)
Fibre
300Mbps
Fibre 50Mbps
Average monthly data usage by plan
(September)
9
Data
usage
(GB)

17 October 2023
Q1 FY24 CONNECTIONS UPDATE
Commerce Commission: Measuring Broadband -NZ, Winter Report, Sept 2023
10

17 October 2023
Q1 FY24 CONNECTIONS UPDATE
Measuring Broadband -NZ, Winter Report, Sept 2023
11