Chorus broadband connections dip in March quarter on heightened competition

Chorus lost ground in the battle for broadband connections in the first three months of the year as end-users switched to fibre provided by local fibre companies and as Spark New Zealand stepped up its wireless network campaign.

The Wellington-based company lost 15,000 broadband connections in the March quarter, leaving it with 1.2 million as at March 31 compared to 1.23 million a year earlier. Chorus' broadband connections on the copper network fell 8.6 percent to 716,000, some of which was mopped up by a 13 percent increase in VDSL connections to 224,000 and a 12 percent gain in fibre connections to 259,000.

The shares fell 2.1 percent to $4.21 and have gained 8.3 percent so far this year.

Chorus said the decline was because "local fibre companies continued to grow their fibre connections and vertically integrated retailers are promoting wireless networks to their customers in rural and urban areas".

The telecommunications network operator has been stressing the reliability of the copper network as its biggest customer, Spark, tries to cut its reliance on the wholesaler's lines by encouraging customers to switch to a wireless broadband service.

Chorus has challenged retail service providers over the lack of support to get customers on to the faster VDSL copper service where there's practically no cost to upgrade and funded a report earlier this year showing fixed wireless speeds match ADSL copper technology but are significantly slower than VDSL and fibre services.

The company said it's kicked off a national campaign to upgrade customers to fibre or VDSL as a stepping stone technology in April, subsidising modem costs for qualifying connections. The promotion will run until the end of September.

Chorus said it's 63 percent through the fibre network roll-out with 526,000 premises passed.

Total fixed line connections fell 39,000 to 1.64 million in the quarter and were 6.2 percent lower than the same period a year earlier.

(BusinessDesk)