Last year was a period filled with “bold, difficult decisions” for telco 2degrees as it weathered the pandemic, but the company ended the year on a high note, according to its latest financials.
As previously reported by Reseller News, 2degrees continued to grow strongly in 2020 despite COVID-19. The company delivered service revenue of $545 million, representing a year-on-year increase of 7.4 per cent, and underlying earnings from operations totalling $180 million, up by 6.5 per cent, during the year ending 31 December 2020.
Underlying earnings from operations, meanwhile, were up 6.5 per cent during the year, from $169 million in 2019, a notable achievement, according to 2degrees CEO Mark Aue, given the absence of high-margin international roaming revenue due to border closures.
“This is a great achievement and a credit to our team’s hard work,” Aue said. “Service revenues are a vital measure of our performance and this year’s record of $545 million reflects growth in the consumer and business market share across all our mobile and broadband offerings."
However, the positive results came at some cost to jobs, as the telco revealed in April last year it was planning to cut its 1,200-strong workforce by 10 per cent, or 120 jobs, as it braced for the impact of the coronavirus pandemic.
“When faced with the uncertainty of 2020 we made bold, difficult but necessary decisions to ensure we delivered for our customers, enabling our business to come through the year in the strongest position possible for future growth," Aue said.
“In doing so, we demonstrated our agility and our operational capabilities to scale the business and continue to invest where we saw strategic growth opportunities,” he added.
The company, owned by Toronto-listed Trilogy International Partners, also saw growth in the business market, in which it now serves more than 106,000 mobile corporate customers, an increase of 20.5 per cent, year-on-year.
In the consumer market, 2degrees’ Mobile Pay Monthly subscribers grew to more than 400,000, an increase of 3.9 per cent, year-on-year. At the same time, the number of broadband subscribers rose 13 per cent, with 2degrees now providing broadband to 115,000 homes.
“The exciting thing for our team is that we are now entering our next growth phase, including our newly minted partnership with the globally recognised market leader in mobile networks, Ericsson, for our exciting 5G rollout,” Aue said.
It was revealed in April that 2degrees, a long-term Huawei customer, was partnering with Ericsson to build its new 5G network.
2degrees said on 14 April its first 5G sites would be built in Auckland and Wellington this year and that the network would expand to the other main centres, with plans for 700 sites.
2degrees is the only telco in New Zealand to use Ericsson’s technology, with Nokia and Samsung also servicing local telcos.
In addition to enabling the 5G network, including its radio access network (RAN), the partnership with Ericsson will also allow 2degrees to double its 4G capacity.
The deal could be transformational for Ericsson in New Zealand as it has consistently failed to win major network contracts over the years.
In March, 2degrees confirmed its shareholders at Trilogy were exploring a potential listing of the company on the New Zealand Stock Exchange and Australian Securities Exchange in the second half of 2021 or early 2022.