Reseller News

Reporting good half-year, Chorus issues warning over "copper shutdown" claims

Chorus is concerned consumers are being misinformed about the end of copper services
JB Rousselot (Chorus)

JB Rousselot (Chorus)

Telco network company Chorus reported a net profit after tax of $31 million, up slightly form $30 million in the corresponding period of 2019.

The result came off lower operating revenues, down to $483 million from $489 million, however, operating expenses were also well down at $151 million compared with $171 million in 2010.

Lower revenues was attributed to a reduction in field services activity requested by third parties for network relocation which was matched by a corresponding decrease in other network costs.

Growth in earnings before interest, tax and depreciation ($332 million compared with $318 million) was achieved through a combination of operating cost reductions and strong broadband connections growth.

New CEO J B Rousselot warned that while the number of disconnections from Chorus' fixed line network slowed markedly in the period, mobile network operators continued to promote their own fixed wireless services as an alternative.

Rousselot said Chorus remained concerned that "the pending shutdown of copper" was being cited incorrectly to customers as a reason to move.

“As we’ve previously said, customers should be clear that we have not announced any timeline for switching off our copper network," Rousselot said.

"If we decide to do so in the future, we’ll communicate it well ahead of time and it would be on a street-by-street basis only where fibre is available as an alternative.” he warned.

Chorus has completed the first phase of the Ultra-Fast Broadband (UFB) rollout, marking the beginning of the wind-down of Chorus’ communal fibre build programme to 28 towns and cities. 

Fibre uptake was at 58 per cent within that zone.

The second phase of the fibre build, UFB2, was around 40 percent complete and there were now just 150,000 premises remaining to be passed by December 2022, Rousselot said.

Fibre uptake in that zone was 34 per cent.

In January, the average household data usage on Chorus’ fibre network was 372 gigabytes, up from 342 in June, 2019.

Customers were increasingly conscious of the limitations of broadband plans with capped data allowances.

“With streaming services like Disney+ increasingly making ultra-high definition, or 4K, content available to customers at no additional cost and online gaming without a console or downloads on the horizon, we expect bandwidth demand to step up yet again," Rousselot said.

Thirteen per cent of fibre customers – up three percentage points in the last six months – have opted for a gigabit plan.

Chorus increased its full-year EBITDA guidance to a range of $640 million to $655 million, from a prior range of $625 million to $645 million.

Dividend guidance was unchanged at 24 cents per share.