Chorus Q1 FY23 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

10 October 2022

Q1 FY23 overview

Total fibre connections increased by 21k to 980,000 (Q4 FY22: +20k)

Fibre uptake across the completed UFB footprint grew to 71% (rounded) with deployment
continuing
• 1.2% increase in the quarter while the fibre footprint passed another 6,000 customers
• mass market fibre broadband connections increased by 20k
• uptake reached 75% (+1%) in UFB1 areas and 51% (+1%) in UFB2 areas
• Auckland reached 80% (+1%) uptake, while Wellington grew to 69% (+1%)
• the fibre rollout was recently completed in Pukenui, Taipa, Tairua, Tokomaru, Martinborough
and Otautau

Total broadband connections increased 1k to 1,190,000* (Q4 FY22: -1k)
• 6k connections were added in Chorus UFB areas
• 1Gbps connections were about one-third of residential fibre adds in Q1
• 1Gbps and Hyperfibre (2-8Gbps) connections now 24% of residential and business
connections

Copper broadband and voice connections declined by 27k (Q4 FY22: -33k)
• voice only disconnections were -8k (Q4 FY22: -12k)
• copper withdrawal: 177 copper broadband cabinets no longer have active customers (Q4
FY22: 84 cabinets)
• total fixed line connections declined by 7k to 1,297,000* (Q4 FY22: -13k)

Average monthly data usage on fibre was 554GB in September (June: 567GB)
• daytime network traffic data indicates continued return of workers from home to the office

*totals exclude ~9,000 broadband connections Chorus is partly subsidising for student households

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
Phone: +64 4 896 4039
Mobile: +64 (27) 488 7808
Email: Brett.Jackson@chorus.co.nz

---

Q1 FY23 Connections Update
10 October 2022

>Fibre uptake across the completed UFB footprint grew to 71% (rounded) with deployment continuing
▪1.2% increase in the quarter while the fibre footprint passed another 6,000 customers
▪mass market fibre broadband connections increased by 20k
▪uptake reached 75% (+1%) in UFB1 areas and 51% (+1%) in UFB2 areas
▪Auckland reached 80% (+1%) uptake, while Wellington grew to 69% (+1%)
▪the fibre rollout was recently completed in Pukenui, Taipa, Tairua, Tokomaru, Martinborough and Otautau
>Total broadband connections increased 1k to 1,190,000* (Q4 FY22: -1k)
▪6k connections were added in Chorus UFB areas
▪1Gbps connections were about one-third of residential fibre adds in Q1
▪1Gbps and Hyperfibre(2-8Gbps) connections now 24% of residential and business connections
>Copper broadband and voice connections declined by 27k (Q4 FY22: -33k)
▪voice only disconnections were-8k(Q4 FY22: -12k)
▪copper withdrawal: 177copper broadband cabinets no longer have active customers (Q4 FY22: 84 cabinets)
▪total fixed line connections declined by 7k to 1,297,000* (Q4 FY22: -13k)
>Average monthly data usage on fibre was 554GB in September (June: 567GB)
▪daytime network traffic data indicates continued return of workers from home to the office
10 October 2022
Q1 FY23 overview
Total fibre connections increased by 21k to 980,000 (Q4 FY22: +20k)
Q1 FY23 CONNECTIONS UPDATE
*totals exclude ~9,000 broadband
connections Chorus is partly subsidising
for student households
2

50%
55%
60%
65%
70%
75%
80%
85%
AucklandDunedinWellington
UFB uptake by quarter
Sep-21Dec-21Mar-22Jun-22Sep-22
Auckland fibre uptake reaches 80%
>Total UFB uptake of 71% (rounded) within completed
footprint in Q1*
▪uptake in UFB1 areas grew from 74% to 75%
▪uptake in UFB2 areas grew from 50% to 51%
▪938,000 connections (Q4 FY22: 919,000) now within
completed footprint, including business premium connections
▪1,330,000customers able to connect (Q4 FY22: 1,324,000)
▪1,042,000 premises passed** (Q4 FY22: 1,037,000) out of
1,054,000 target = UFB rollout 99% complete
(note: data includes some UFB2 areas that have been partially built, but not yet submitted
for Crown sign-off)
>26,000 fibre installations completed in Q1 (Q4 FY22: 25k)
▪customer satisfaction reduced from 7.8 to 7.7
▪WIP reduced from 14k to 13k
▪field crews reduced from ~520 to ~450 due to resourcing
challenges
* includes ~3kpartly subsidised education connections
**under the UFB contract, a multi-dwelling unit or single office block is one premises
Uptake
10 October 2022
Q1 FY23 CONNECTIONS UPDATE
▪Auckland, Wellington and Dunedin cover >70% of
UFB1 homes and businesses able to connect
▪91% of Chorus’ broadband connections in our
planned UFB zone are now on fibre
student
holidays
3

>300Mbps plans account for 68% of residential connections
>~1/3of residential fibre adds were 1Gbps plans in Q1
>1Gbps and Hyperfibreuptake now 24% across residential and business broadband connections
10 October 2022
Q1 FY23 CONNECTIONS UPDATE
Mass market fibre connections grew 20k
0
100,000
200,000
300,000
400,000
500,000
600,000
700,000
800,000
900,000
Sept 2021Dec 2021Mar 2022June 2022Sept 2022
Residential
1Gbps300Mbps200Mbps100Mbps<100MbpsVoice
4
0
10,000
20,000
30,000
40,000
50,000
60,000
70,000
80,000
90,000
100,000
Sept 2021Dec 2021March 2022June 2022Sept 2022
Business
1Gbps500Mbps300Mbps200Mbps100Mbps<100MbpsVoice

0
200,000
400,000
600,000
800,000
1,000,000
1,200,000
1,400,000
30-Sep-2131-Dec-2131-Mar-2230-Jun-2230-Sep-22
10 October 2022
30 Sept
2021
31 Dec
2021
31 March
2022
30 June
2022
30 Sept
2022
Unbundled copper
(no broadband)
8,0006,0003,0001,0001,000
Baseband copper
(no broadband)
127,000119,000112,000102,00094,000
Copper ADSL
(includes naked)
152,000142,000133,000122,000112,000
VDSL
(includes naked)
148,000138,000128,000118,000109,000
Fibre broadband
(GPON)
883,000907,000929,000949,000969,000
Data services
(copper)
2,0002,0002,0002,0001,000
Fibre premium
(P2P)
11,00011,00010,00010,00011,000
Total connections
1,331,0001,325,0001,317,0001,304,0001,297,000
Fibre (GPON)
VDSL
Copper ADSL
Unbundled copper
Baseband copper
Fibre comprises 76% of Chorus connections
>1,190,000 broadband connections comprises:
▪969,000 fibre (GPON) connections
▪221,000 VDSL/ADSL (copper) connections
Business premium
Note: 9,000 partly subsidisededucation connections are excluded from this data
Q1 FY23 CONNECTIONS UPDATE
5

10 October 2022
Connection changes by Zone (indicative as at 30 Sept)
* Excludes 9k partly subsidised education connections and 12k fibre premium and data services (copper) connections
** Includes planned Chorus UFB1, 2 and 2+ coverage
6
4
7
9
7
-2
-3
-2
-2
-1
-3
-2
-2
-3
-3
-6
-8
-7
-6
-8
-1
-2
-1
-2
-1
-1
-2
-2
-2
-3
-10-50510
Q1 FY23
Q4 FY22
Q3 FY22
Q2 FY22
Q1 FY22
Q1 FY23
Q4 FY22
Q3 FY22
Q2 FY22
Q1 FY22
Q1 FY23
Q4 FY22
Q3 FY22
Q2 FY22
Q1 FY22
Broadband connections
Copper (no broadband) connections
Quarterly change (’000s) by zone*
Q1 FY23 CONNECTIONS UPDATE
Other fibre
company (LFC)
zone
Broadband connections32,000Disconnections continue due to Local Fibre
Company and fixed wireless provider activity,
with some slowdown due to COVID-19 effects.
Copper line (no broadband)18,000
TOTAL50,000
Non-UFB zoneBroadband connections140,000Some expansion of wireless broadband footprint
through Government backed programme. New
housing outside of UFB zone driving fibre
premises growth.
Copper line (no broadband)28,000
TOTAL168,000
Chorus UFB
zone**
Broadband connections1,018,000Continued broadband growth driven by Chorus
incentives and migration campaigns. Copper
voice disconnections reflect migration to fibre
and targeted fixed wireless activities.
Copper line (no broadband)49,000
TOTAL1,067,000
6

>10k managed migration installations completed in Q1
(Q4 FY22: ~10k)
>marketing activity drove activation of installed fibre
sockets (ONTs) from ~9k to ~10k in Q1
▪45% of these activations were at offnet addresses
10 October 2022
Managed migration programme lifts connections
0
2,000
4,000
6,000
8,000
10,000
12,000
14,000
16,000
18,000
Q1 FY22Q2 FY22Q3 FY22Q4 FY22Q1 FY23
Managed migration programme
InstallationsConnections
Q1 FY23 CONNECTIONS UPDATE
7

Monthly average data usage on fibre 554gigabytes
>Reduction in fibre/average usage likely reflecting
continued return of workers from homes to offices
▪554GBon fibre (June:567GB)
▪290GBon copper (June:282GB)
▪504GBaverage (June:508GB)
>Average peak throughput on our network at peak time
(~9pm) was consistent at 3.3Tbps
10 October 2022
290
554
504
0
100
200
300
400
500
600
CopperFibreAverage
Data
usage
(GB)
Monthly average data usage per connection on
our network*
* includes upstream traffic from June 2020 onwards
Q1 FY23 CONNECTIONS UPDATE
8

10 October 2022
Commerce Commission broadband testing report
▪The Commerce Commission’s Measuring Broadband New Zealand, Winter Report (August 2022) continues to highlight
the strong performance of fibre relative to other technologies, particularly for download, upload and latency.
Q1 FY23 CONNECTIONS UPDATE
Source: Commerce Commission
9