Chorus connections keep falling in December quarter

Chorus CEO Kate McKenzie has started encroaching on Spark's turf.
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Chorus lost 23,000 fixed-line connections in the final three months of 2017, shedding lines at the same pace as the September quarter when it embarked on a marketing campaign extolling the virtues of fixed-line service.

The Wellington-based telecommunications network operator's total connections shrank to 1.56 million as at Dec. 31 from 1.58 million as at Sept. 30, and down from 1.68 million a year earlier. Within that, broadband connections decreased 3,000 to 1.18 million in the quarter and were down from 1.21 million a year earlier.

Chorus identified connection losses as one of its biggest challenges last year when Spark New Zealand - its biggest customer - launched a fixed wireless broadband product as an alternative to the traditional copper-based connection, prompting the network operator to promote its fixed-line business more aggressively and staunching the outflow.

Chief executive Kate McKenzie has started encroaching on Spark's turf, floating the prospect of a shared infrastructure build for fifth-generation mobile network infrastructure along the same lines as the government-sponsored ultra-fast broadband fibre network. Chorus is already dabbling in wireless technology in a pilot project with Network For Learning expanding wi-fi access for schools in an effort to bridge a gap between classrooms and homes.

Chorus's fibre connections now account for 31 percent of broadband connections, rising 34,000 in the December quarter to 362,000, compared to 19 percent of broadband connections at 231,000 a year earlier. Within UFB areas the fibre update is 42 percent, compared to 39 percent in September.

Monthly average data usage per connection rose to 174 gigabytes from 162GB in the September quarter, with fibre users averaging 250GB a month compared to 141GB on copper.

The company noted the rising use of online streaming video as driving growth in data use last year, and network strategy manager Kurt Rodgers said he expects 2018 usage will keep growing as smart home devices become more popular and smart phones are increasingly used over home wi-fi networks.

Chorus shares fell 0.7 percent to $4.15 and have increased 1.7 percent over the past 12 months. The stock is rated an average 'hold' based on five analyst recommendations compiled by Reuters with a median price target of $4.29.


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5 Comments & Questions

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I live in Auckland and I have been waiting for my UFB connection now for six months. I live on a cross-leased section at the back with a bog standard drive up to the street and a garden strip (without any garden in it at the moment about 1.5m wide, just dirt) between the drive and the next door neighbour's boundary. It may be 30m from my house to the street.

First, they cancelled my request without telling me because they couldn't get consent from my neighbour to run the cable up the common area driveway. My neighbour is more than happy to grant them consent and has done so - and has told me that on many occasions and they want UFB installed into their place at the same time.

So I reapplied through my broadband provider and this time they put together a proposal and said the neighbour had two weeks to object. The two weeks came and went and then about 6 weeks later I got an email to say that they had cancelled their initial design proposal for the install and had redesigned a new proposal. And because they have done that, it means it has to go back to square one, with the neighbour having two new weeks to object and then after that the work commencing at some later date. And the new proposal, by the way, looks identical to the old. I cannot see any difference between them.

I mean you cannot make this stuff up. Why can't I and my neighbour just get a private contractor around to install it for the both of us which could be done within a few weeks?

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Because the Telco's insist on creating email chains that keep people employed. I have witnessed multiple variations on your situation many times, and It is almost a guarantee no-one inside the Telco's or fibre wholesaler used a phone to sort it out. While email is important for sending documents to verify what has been agreed to, in many Telcos, it gets abused. That is why small Telcos can resolve 99% of issues in less than an hour, but hours or days for the larger Telcos.

Many broadband Telcos are also phone and mobile providers. Despite advertising the virtues of mobile phones and instant communication, most rely exclusively on email. On multiple occasions after viewing clients' email chains stretching over days, week, or in some cases, like yours, months, and that did not get a resolve, the problem gets fixed with one phone call usually because the person needed to unblock the problem had never been communicated to.

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I live in Auckland and have been waiting 2.5 years for confirmed fibre. By the time Chorus delivers it, I will be fully wireless. Bunch of utterly useless time wasters.

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You must have hit the Telco team that still use smoke signals to send messages.

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Since the neighbour also wants UFB, why didn't they also place an order themselves? They will have to anyway to get the ONT installed in their house. And it would have quickly solved the consent issues having all property owners wanting to be connected.

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