IT Services…
Meanwhile, IT services revenue rose 6.9%, underpinned by the ongoing repositioning of Spark Digital (formerly Gen-i) and investments in Cloud computing, through Revera and Appserv, and in data centres, including new and expanded facilities.
The tight management of operating costs remained, with expenses from continuing operations reducing 2.4% to $1,361 million, reflecting the ongoing flow-through benefits from the Turnaround Programme.
“The rebrand from Telecom to Spark New Zealand in August 2014 was executed superbly and is already making a difference to online and store traffic, to increased customer preference and consideration and to our market share momentum,” Moutter adds.
“An emphasis on delivering a range of additional services that consumer’s value, such as Spotify, Lightbox, nationwide WiFi, Socialiser and many others has enabled the Spark New Zealand brand to build differentiation positions in mobile and broadband.
“This has been supported by our multi-brand strategy, which has seen Skinny mobile and Bigpipe broadband improve their market presence.”
Moutter says business customers have benefited from the ongoing repositioning into Cloud computing and data centres, triggered by the telco’s network nationwide fibre services, a completed optical transport network, and its rapidly expanding 4G mobile network.
“We now believe Spark New Zealand is overtaking its competitors in 4G mobile coverage,” he claims.
“We have also upped the ante in the emerging online TV market in New Zealand with Lightbox TV, which launched on-time in August 2014, well ahead of competition, to very positive customer feedback.
“Lightbox also formed a strategic joint venture with online sports company Coliseum, which has rights to PGA Golf, French Rugby and the English Premier League, to form Lightbox Sport.”
Second half focus…
Moutter says the company’s focus during the second half of the financial year will be on maintaining intensity of execution, reflecting the telco’s “determination to build on the firm foundation that is setting up the company for growth.”
“In August 2014 we provided guidance of low single digit growth in EBITDA and low single digit decline in revenue,” he adds.
“However, it is still uncertain as to the date the new Chorus input charges will take effect, with the possibility of backdating.”
Subject to a final Commerce Commission decision on backdating, Moutter says the company “remains on track” for this guidance with, as we saw in the 2014 financial year, more of the benefits of our actions expected to show through in the second half.
“Our overall confidence around continuing solid market performance and cash generation has enabled the Directors to declare a half-year dividend of 9 cents per share,” he adds.
“More than a million New Zealanders have an ownership stake in Spark New Zealand, either directly as shareholders or indirectly through KiwiSaver investments.
“And with an ever-growing dependence on high-quality connectivity and services for consumers and businesses alike, Spark New Zealand has an important role to play in our country’s future progress.
“That’s a responsibility that helps drive our ambitions.”