Q4 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

9 July 2024

Q4 FY24 Connections Update

Chorus today released its connections update for the Q4 period to 30 June.


Fibre uptake lifts to 71.4%

Chorus’ fibre network footprint, excluding other local fibre company areas, grew by 7,000
addresses in the quarter to just over 1.5 million addresses. Fibre uptake within this
footprint grew by 0.4% to 71.4%. Auckland is at 76.6% uptake, compared to Dunedin on
76.5% and Wellington on 70.7%.

Fibre connections grew by 10,000 in the quarter, slightly below growth of 12,000 fibre
connections in Q3.

Strong demand continued for the entry level 50Mbps Home Fibre Starter service with
another 9,000 connections added. Business and residential consumers on speeds of
500Mbps and above grew by 8,000 connections. About 25% of residential connections
are on speeds of 1Gbps and above, while 79% of business connections are on speeds of
500Mbps and above.

Average monthly data use surpasses COVID lockdown levels

Average monthly data usage on fibre was 623 gigabytes in June, up from 598GB in
March and above the peaks last seen during 2021 COVID lockdowns. The proportion of
fibre users consuming more than 1 terabyte of data also lifted from 15% to 16%.

The OECD has said the shift to a post-pandemic digital future requires high-quality
broadband networks characterised by high speeds, high reliability and low latency.
Recent data shows an accelerating international shift to fibre networks within the OECD,
with fibre the dominant fixed network technology in June 2023. Of total fixed broadband
subscriptions, 41% were on fibre with cable falling to 30.5% and copper falling to 21.9%.


Just 45,000 copper connections remain in Chorus fibre areas

The global shift away from legacy copper networks is reflected in Chorus’ connection
numbers. The number of copper connections declined by 19,000 in Q4, compared to
18,000 in the prior quarter. This drove an overall reduction in Chorus’ fixed line
connections from 1,250 ,000 to 1,241,000
1
connections in the quarter.

1
This total includes partly subsidised fibre and copper broadband connections for students.

Just 45,000 copper connections remain in areas where Chorus has fibre available and of
these, about 30 ,000 have already been notified that copper services will be withdrawn
within six months. To date, Chorus has withdrawn copper services to a further 52,000
consumers under this process and about 1,250 copper broadband cabinets have been
closed.



Authorised by:

Katrina Smidt
Acting Chief Financial Officer

ENDS


For further information:

Vicki Gan
Media and Content Manager
Phone +64 99752940
Email: Vicki.Gan@chorus.co.nz

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

---

Q4 FY24 Connections Update
9 July 2024

>Fibre connections (including non-address points and LFC areas) increased 10k (Q3 FY24: +12k) and now total
1,084,000*
>Chorus’ fibre footprint now covers 1,506,000 addresses (excluding LFC areas)
▪fibre passed another 7,000 addresses in Q4 (Q3: +7k)
▪overall fibre uptake grew 0.4% to 71.4% in Q4 (Q3: +0.4%)
▪Auckland +0.1%; Dunedin +0.2%; Wellington no change
>Broadband connections reduced 3k to 1,185,000*
▪in Chorus fibre areas, a 9k increase in fibre broadband connections offset a 7k reduction in copper broadband
▪fibre connections of 500Mbps+ grew by 8k across residential and business plans
▪Home Fibre Starter (50Mbps) connections grew 9k to 47k
>Total fixed line connections declined by 9k (Q3: -6k) and now total 1,241,000*
▪copper broadband and voice connections declined by 19k (Q3: -18k)
▪voice only disconnections were -6k (Q3: -6k)
▪copper withdrawal: 1,253 copper broadband cabinets no longer have active customers (Q3: 996 cabinets)
>Average monthly data usage on fibre grew from 598GB to 623GB
▪the proportion of terabyte users (i.e. consuming 1,000GB+ a month) lifted from 15% to 16%
9 July 2024
Q4 FY24 overview
*FY24 totals include fibre and copper DSL broadband connections Chorus is partly subsidising for student households
Q4 FY24 CONNECTIONS UPDATE
2

9 July 2024
30 June
2023
30 Sept
2023
31 Dec
2023
31 March
2024
30 June
2024
Baseband copper
(no broadband)
72,00064,00057,00051,00045,000
Copper ADSL
(includes naked)
84,00075,00068,00062,00056,000
VDSL
(includes naked)
83,00075,00068,00062,00055,000
Data services
(copper)
1,0001,0001,0001,0001,000
Fibre broadband
(GPON)
1,021,0001,041,0001,052,0001,064,0001,074,000
Fibre premium
(P2P)
10,00010,00010,00010,00010,000
Total
connections
1,271,0001,266,000*1,256,000*1,250,000*1,241,000*
* Includes DSL and GPON partly subsidised education connections that were previously excluded from broadband totals
Fibre comprises 87% of Chorus connections
Q4 FY24 CONNECTIONS UPDATE
3
▪Copper connections declined 19k
(~11%) in Q4 and total 157k
▪Fibre connections grew 10k (~1%)
in Q4 and total 1,084k

9 July 2024
Fibre uptake grew 0.4% to 71.4%
71.4% fibre uptake across 1,506,000
passed addresses*
ouptake +0.4% in Q4
o+9k fibre connections to addresses**
o+7k addresses passed in Q4
1,294,000 fibre installed addresses
o20k installations in Q4 (Q3:~18k)
o212,000 addresses passed by fibre, but
fibre socket not yet installed (Q3:226k)
64.0
65.0
66.0
67.0
68.0
69.0
70.0
71.0
72.0
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 30 June 2024
Q4 FY24 CONNECTIONS UPDATE
4

9 July 2024
Uptake by city
50
55
60
65
70
75
80
AucklandDunedinWellington
Uptake, by urban area, for fibre passed
addresses
Mar-23Jun-23Sep-23Dec-23Mar-24Jun-24
Uptake
(%)
>Uptake is measured across “urban areas” as defined by
Statistics NZ, rather than the original UFB rollout area
▪Auckland uptake grew 0.1% to 76.6% in Q4
despite ongoing address growth
▪Dunedin uptake increased 0.2% to 76.5%
▪Wellington uptake was flat at 70.7% as address
growth offset connections growth
Q4 FY24 CONNECTIONS UPDATE
5

>Home Fibre Starter (50Mbps) connections grew by 9k to 47k; plans below 300Mbps are 11% of residential connections
>business and residential connections of 500Mbps+ grew by 8k
>79% of business connections are on 500Mbps or faster; 25% of residential plans are on 1Gbps or faster
>Hyperfibre connections of 2Gbps and above grew to 3.5k with ~80% on residential plans
9 July 2024
Mass market fibre connections
Q4 FY24 CONNECTIONS UPDATE
6
-
100,000.00
200,000.00
300,000.00
400,000.00
500,000.00
600,000.00
700,000.00
800,000.00
900,000.00
1,000,000.00
Jun-23Sep-23Dec-23Mar-24Jun-24
Residential
2Gbps+1Gbps300Mbps200Mbps100Mbps<100MbpsVoice
-
20,000.00
40,000.00
60,000.00
80,000.00
100,000.00
120,000.00
Jun-23Sep-23Dec-23Mar-24Jun-24
Business
2Gbps+1Gbps500Mbps300Mbps
200Mbps100Mbps<100MbpsVoice

9 July 2024
Connection changes by Zone (indicative as at 30 June*)
* Excludes ~13k fibre premium and data services (copper) and smart location connections
-3
-4
-4
-5
-2
-1
-1
-1
-1
-2
-1
-7
-8
-8
-10
-5
-2
-4
-5
-1
-2
-2
-2
9
12
11
18
-20020
Q4 FY24
Q3 FY24
Q2 FY24
Q1 FY24
Q4 FY24
Q3 FY24
Q2 FY24
Q1 FY24
Q4 FY24
Q3 FY24
Q2 FY24
Q1 FY24
Copper line only
Copper broadband
Fibre broadband
Quarterly change (’000s) by zone
Other fibre
company (LFC)
zone
Copper lines (no broadband)8,000Local Fibre Company and fixed wireless provider
activity is driving a gradual decline in copper
connections.
Copper broadband lines12,000
Fibre broadband lines (GPON)3,000
TOTAL23,000
Non-fibre
addresses (i.e.
Chorus fibre not
available)
Copper lines (no broadband)18,000Ongoing decline in copper connections due to
mobile/fixed wireless/satellite footprint
expansion.
Copper broadband lines74,000
TOTAL92,000
Chorus fibre zoneCopper lines (no broadband)20,000Covers 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 lines25,000
Fibre broadband lines (GPON)1,068,000
TOTAL1,113,000
Q4 FY24 CONNECTIONS UPDATE
7

9 July 2024
0
20
40
60
80
100
120
Copper voice
Copper broadband
Connections
(thousands)
Chorus fibre
zone
LFC fibre zone
Non fibre zone
Copper connections able to be withdrawn with 6
months’ notice where fibre is available
>~82,000 copper withdrawal notifications
issued (cumulative) in fibre areas
▪copper service ceased for ~52,000 notified
connections; ~30k currently under notice
▪1,253 copper broadband cabinets closed
(Q3: 996); 1,416 under closure notice
▪broadband retention rate of 78% across
closed cabinets
>managed migration initiatives: activation
of installed fibre sockets (ONTs)
▪~6k sockets activated in Q4 (Q3: ~6k)
▪59% of activations were offnet addresses
(Q3: 58%)
Copper withdrawal: 30k connections under notice
Q4 FY24 CONNECTIONS UPDATE
8

Monthly average data usage on fibre 623 gigabytes
>monthly average data usage on fibre grew to 623GB in
June, surpassing the prior peak of 621GB in Sept 2021
during pandemic lockdowns
>the proportion of fibre connections using more than 1
terabyte of data was 16%
>copper usage increased from 273GB in March to 284GB


9 July 2024
284
623
0
100
200
300
400
500
600
Jun-20
Sep-20
Dec-20
Mar-21
Jun-21
Sep-21
Dec-21
Mar-22
Jun-22
Sep-22
Dec-22
Mar-23
Jun-23
Sep-23
Dec-23
Mar-24
Jun-24
CopperFibre
Data
usage
(GB)
Monthly average data usage per connection*
* includes upstream traffic
Q4 FY24 CONNECTIONS UPDATE
9

9 July 2024
Q4 FY24 CONNECTIONS UPDATE
10
OECD data shows an accelerating shift to fibre
Driven by the need for high-quality broadband
“The recovery from the COVID-19 pandemic leaves no doubt:
the future is digital, enabled by globally interconnected high-
quality broadband networks. Applications across all sectors of
the economy, from online education, telemedicine and
sustainable development, to smart factories, smart hospitals to
automated vehicles, increase the overall demand on networks.
All these applications require the ability to move much more
data across networks and require high-quality networks,
characterised by high speeds, high reliability (i.e. few errors or
delays measured by packet loss), and improved network
response times (i.e. low latency).”
OECD – Broadband Networks of the Future, July 2022
Source: OECD https://www.fibre-systems.com/article/fibre-fwa-experience-strongest-growth-three-years-oecd-countries

9 July 2024
Q4 FY24 CONNECTIONS UPDATE
11
MBNZ report shows reliability and consistency of fibre
Disconnection rate (per day)Average latency under load (milliseconds)
Source: Measuring Broadband NZ,
Report 20, June 2024
Lower is better

9 July 2024
Q4 FY24 CONNECTIONS UPDATE
12
Average Download Speed (Mbps)
Average Upload Speed (Mbps)
Source: Measuring Broadband NZ,
Report 20, June 2024