Chorus Q2 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

25 January 2024

Q2 FY24 Connections Update

Chorus today released its connections update for the Q2 period to 31 December.
The results show continued growth in fibre connections, up 11,000 to 1,062,000
1
, with
demand in some areas affected by student holidays during the quarter.

The entry level 50Mbps Home Fibre Starter service continued to gr ow strongly and was
up another 7,000 connections in the quarter to 30,000. Residential plans for speeds of
1Gbps and above grew by 4,000 connections and make up 25% of plans.

Fibre broadband connections grew by 11,000 in areas where Chorus had fibre available,
more than offsetting copper broadband reductions in that footprint. However, total
broadband connections de creased by 3,000 to 1,188,000
2
largely due to copper
broadband reductions in areas beyond Chorus’ fibre footprint.

Copper voice lines reduced by 7,000 in the quarter and this drove most of the reduction
in fixed line connections to 1,256,000
3
, down from 1,266,000 connections in September.
Total copper connections reduced by 21,000 in the quarter, compared to a 25,000
connection decline in the prior quarter.


Record peak time data usage

Average monthly data usage on fibre grew from 585GB in September to 599GB in
December, close to record usage levels previously achieved during COVID lockdowns in
late 2021. The proportion of broadband connections using more than 1 terabyte of data
grew from 15% to 16% in the quarter.

A new peak time throughput record of 5.3 terabits per second was set in December,
coinciding with a Fortnite gaming update.


Fibre uptake

Fibre uptake grew by 0.4% to 70.6% in the quarter compared to 0.5% in the same
December quarter a year ago. Fibre uptake is reported based on all current addresses,

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

excluding those in other local fibre company (LFC) areas, that have been passed by
Chorus fibre.

Chorus’ fibre footprint, excluding LFC areas, was about 1,493,000 addresses as at 31
December, an increase of 7,000 addresses in the quarter. There were 1,054,000
connections across this footprint. There were 238,000 addresses passed by fibre that did
not yet have fibre installed into the address, down from 252,000 at the last quarter.

Uptake in Dunedin decreased 1.3% to 74.8% reflecting the annual effect of seasonal
student demand in the city. Fibre uptake in the Auckland urban area increased 0.1% to
76.4% while Wellington’s uptake reduced 0.1% to 70.4% as footprint growth outweighed
connection growth in the quarter.

Chorus’ copper withdrawal programme continues to drive fibre connection growth,
al though this contribution is expected to reduce as the pool of remaining copper
connections shrinks. Just 67,000 copper connections remain in areas where Chorus has
fibre available and a further 25,000 copper connections are in other local fibre company
areas. Copper services have now ceased for about 36,000 notified connections, up 7,000
in the quarter, and more than 820 copper broadband cabinets have been closed.

This leaves about 101,000 copper connections in areas where fibre is not available. That
number was down 5,000 in the quarter as consumers migrated to alternative wireless
and satellite networks.


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
Mobile: +64 (27) 488 7808
Email: Brett.Jackson@chorus.co.nz

---

Q2 FY24 Connections Update
25 January 2023
Q2 FY24 CONNECTIONS UPDATE

>Fibre connections (including non-address points and LFC areas) increased 11k (Q1 FY24: +19k) and now total
1,062,000*
>Chorus’ fibre footprint now covers 1,493,000 addresses (excluding LFC areas)
▪fibre passed another 7,000 addresses in Q2 (Q1: +9k)
▪overall fibre uptake grew 0.4% to 70.6% in Q2 (Q1: +0.8%) despite demand in some areas affected by student holidays
▪Auckland +0.1%; Wellington -0.1%; Dunedin -1.3%
>Broadband connections reduced 3k and now total 1,188,000*
▪~11k fibre broadband connections were added in Chorus fibre areas, outpacing copper broadband disconnects by +3k
▪Home Fibre Starter (50Mbps) connections grew 7k to 30k
▪1Gbps and Hyperfibre (2Gbps+) connections grew by 4k to 234k and make up 25% of residential plans
>Total fixed line connections declined by 10k (Q1: -7k) and now total 1,256,000*
▪copper broadband and voice connections declined by 21k (Q1: -25k)
▪voice only disconnections were -7k (Q1: -8k)
▪copper withdrawal: 826 copper broadband cabinets no longer have active customers (Q1: 663 cabinets)
>Average monthly data usage on fibre grew to 599GB from 585GB in September
▪the proportion of terabyte super users (i.e. consuming 1,000GB+ a month) grew to 16%
▪a new record for peak time throughput of 5.3Tbps was achieved in December
25 January 2023
Q2 FY24 overview
*FY24 totals include ~1,000 fibre and ~1,000 copper DSL broadband connections Chorus is partly subsidising for student households
Q2 FY24 CONNECTIONS UPDATE
2

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
31-Dec-2231-Mar-2330-Jun-2330-Sep-2331-Dec-23
25 January 2023
31 Dec
2022
31 March
2023
30 June
2023
30 Sept
2023
31 Dec
2023
Unbundled copper
(no broadband)
not
material
not
material
not
material
not
material
not
material
Baseband copper
(no broadband)
85,00080,00072,00064,00057,000
Copper ADSL
(includes naked)
102,00094,00084,00075,00068,000
VDSL
(includes naked)
100,00092,00083,00075,00068,000
Fibre broadband
(GPON)
986,0001,002,0001,021,0001,041,0001,052,000
Data services
(copper)
1,0001,0001,0001,0001,000
Fibre premium (P2P)11,00010,00010,00010,00010,000
Total connections
1,285,0001,279,0001,271,0001,266,000*1,256,000*
Fibre (GPON)
VDSL
Copper ADSL
Baseband copper
>1,188,000* broadband connections comprises:
▪1,052,000 fibre (GPON) connections
▪136,000 VDSL/ADSL (copper) connections
>CPI increase of 5.65% applied to copper baseband and copper broadband services from mid-December
Business premium
* Includes 1k DSL and 1k GPON partly subsidised education connections that were previously excluded from broadband totals
Q2 FY24 CONNECTIONS UPDATE
Fibre comprises 85% of Chorus connections
3

25 January 2023
Q2 FY24 CONNECTIONS UPDATE
Fibre available to 1.49m addresses; 70.6% uptake
▪70.6% fibre uptake across 1,493,000
passed addresses*
ouptake +0.4% in Q2
o1,054,000 active fibre connections**
(+11k in Q2)
o+7,000 addresses passed in Q2
▪1,256,000 fibre installed addresses
o~23,000 installations in Q2 (Q1: 27k)
o238,000 addresses passed by fibre, but
fibre socket not yet installed (Q1: 252k)
64.0
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
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 31 December 2023
4

25 January 2023
Q2 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-23Dec-23
Uptake
(%)
>Uptake is measured across “urban areas” as
defined by Statistics NZ, rather than original UFB
rollout area
▪Auckland uptake grew 0.1% to 76.4% in Q2
despite ongoing address growth
▪Dunedin uptake decreased 1.3% to 74.8%
reflecting student seasonality
▪Wellington decreased 0.1% to 70.4% as fibre
footprint growth was greater than connection growth
5

25 January 2023
Connection changes by Zone (indicative as at31 Dec*)
* Excludes ~13k fibre premium and data services (copper) and smart location connections
-4
-5
-6
-3
-1
-1
-1
-1
-2
-1
-1
-1
-8
-10
-11
-9
-4
-5
-6
-5
-2
-2
-2
-2
11
18
19
16
-20020
Q2 FY24
Q1 FY24
Q4 FY23
Q3 FY23
Q2 FY24
Q1 FY24
Q4 FY23
Q3 FY23
Q2 FY24
Q1 FY24
Q4 FY23
Q3 FY23
Copper line only
Copper broadband
Fibre broadband
Quarterly change (’000s) by zone
Q2 FY24 CONNECTIONS UPDATE
Other fibre
company (LFC)
zone
Copper lines (no broadband)10,000Local Fibre Company and fixed wireless provider
activity is driving a gradual decline in copper
connections.
Copper broadband lines15,000
Fibre broadband lines (GPON)3,000
TOTAL28,000
Non-fibre
addresses (i.e.
Chorus fibre not
available)
Copper lines (no broadband)20,000Ongoing decline in copper connections due to
mobile/fixed wireless/satellite footprint
expansion.
Copper broadband lines81,000
TOTAL101,000
Chorus fibre zoneCopper lines (no broadband)27,000Covers all addresses outside of LFC UFB rollout
zone where Chorus fibre is available. Fibre
footprint is growing as a result ofnew property
development. Copper connections are reducing
as Chorus retires its copper network.
Copper broadband lines40,000
Fibre broadband lines (GPON)1,047,000
TOTAL1,114,000
6

>Home Fibre Starter (50Mbps) connections grew by 7k to 30k; plans below 300Mbps are 10% of residential connections
>1Gbps and Hyperfibre (2Gbps+) connections grew by 4k to 234k and make up 25% of residential plans
>75% of mass market business plans are on 500Mbps or above
>~3k Hyperfibre connections with 85% on residential 2Gbps+ plans
25 January 2023
Mass market fibre connections
Q2 FY24 CONNECTIONS UPDATE
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
1,000,000
Dec 2022March 2023June 2023Sept 2023Dec 2023
Residential
2Gbps+1Gbps300Mbps200Mbps100Mbps<100MbpsVoice
0
20,000
40,000
60,000
80,000
100,000
120,000
Dec 2022March 2023June 2023Sept 2023Dec 2023
Business
2Gbps+1Gbps500Mbps300Mbps200Mbps100Mbps<100MbpsVoice
7

25 January 2023
Copper withdrawal programme
>~47,000 initial withdrawal notifications issued (cumulative)
▪copper service ceased for ~36,000 notified connections (Q1:29k)
▪826 copper broadband cabinets now closed (Q1: 663)
▪broadband retention rate of 82% across closed cabinets (Q1:83%)
>managed migration initiatives: activation of installed fibre
sockets (ONTs)
▪~7k sockets activated in Q2 (Q1: ~8k)
▪57% of activations were offnet addresses (Q1: 54%)
826
1,435
1,584
Copper broadband cabinets –Chorus
UFB area
Closed
Notified
In service
Q2 FY24 CONNECTIONS UPDATE
8

Monthly average data usage on fibre 599gigabytes
>monthly average data usage on fibre grew from 585GB
in September to 599GB in December
>copper usage increased from 273GB in September to
282GB in December
>the proportion of broadband connections using more
than 1 terabyte of data grew from 15% to 16% in the
quarter
>a new peak time throughput record of 5.3Tbps was set
in December, coinciding with a Fortnite update


25 January 2023
282
599
0
100
200
300
400
500
600
CopperFibre
Data
usage
(GB)
Monthly average data usage per connection*
* includes upstream traffic
Q2 FY24 CONNECTIONS UPDATE
9