Roaming revenue drop leads to full-year declines for Spark

Telco says beyond its dip in roaming revenue, the business performed well.
Written by Chris Duckett, Contributor
Image: Spark

New Zealand telco Spark has reported a slight 0.8% dip in revenue to NZ$3.6 billion for its full year to June 30, which has flowed through to an 8.6% drop to NZ$384 million in net profit.

The blame for the revenue dip was pinned on a lack of roaming revenue due to border closures in the nation as a response to the pandemic, which left a NZ$38 million hole.

"The New Zealand economic recovery has been stronger than expected, but with recent travel bubble pauses, uncertainty remains. Closed international borders continue to impact Spark through the loss of roaming revenues, lower overall growth in some markets, and talent scarcity within the technology sector," Spark chair Justine Smyth said.

Otherwise, the company said it had a strong underlying performance, and reported earnings before interest, tax, depreciation, amortisation, and net investment income being up 1% to NZ$1.12 billion.

By segment, mobile increased by 1.8% to NZ$1.3 billion, broadband dropped 1.5% to NZ$670 million, cloud, security and service management jumped 5.5% to NZ$443 million, and voice declined 20% to NZ$308 million.

Spark said it now has 2.4 million mobile connections, 701,000 broadband connections, and experienced an 83% increase in IoT customers to 450,000. Across the year, the telco said it saw a 40% increase in wireless broadband traffic and a 10% in peak mobile calling.

"We have a clear view of the infrastructure assets that are currently critical to our competitive advantage and resilience, and that we want to invest in -- including the active components of our mobile network, multi-access edge compute, our critical network exchanges, and datacentre capacity," CEO Jokie Hodson said.

"We have today announced an additional NZ$35 million investment to accelerate our 5G rollout, bringing our total investment in mobile connectivity to NZ$125 million in FY22 and supporting us to deliver 90% population coverage by the end of calendar year 2023, assuming the necessary spectrum is made available by the government."

The telco said it was looking into sharing its passive elements of its mobile and fibre networks.

"Spark is actively exploring shared ownership models; however, discussions are ongoing and there is no certainty that any transaction will proceed," the telco said.

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