Spark reports earnings on the back of mobile, wireless, cloud services and focus on productivity

Spark reports earnings on the back of mobile, wireless, cloud services and focus on productivity

Jolie Hodson

Jolie Hodson

Credit: Spark NZ

Spark New Zealand says it has delivered profit growth, stronger operating margins and market share gains in its financial results for the year to 30 June 2019.

Spark chair Justine Smyth says the continued improved performance was founded on a clear strategy with strong execution and greater customer focus.

 It means Spark is on track to deliver on key financial aspirations communicated in June 2017 as part of the company’s three-year strategy. 

“We’ve grown our business in the highly competitive mobile and cloud services categories, held our broadband position, entered new markets like sports streaming, led on cost management and transformed our company culture,” says Smyth, in a statement. 

“It’s very pleasing to achieve these positive outcomes in a year during which we implemented and embedded massive organisational change with the move to agile ways of working.” 

Operating revenues and other gains of $3.533 billion were flat year-on-year, as growth markets (mobile, broadband, cloud and security) were offset by expected declines in legacy voice and managed data and networks products. 

Overall reported net earnings were $409 million, up 12.1 per cent ($44 million), or 2.2 per cent ($9 million) compared with the adjusted prior year performance. 

Spark chief executive Jolie Hodson says a commitment to create a wireless future for New Zealanders was central to the company’s strategy.  

Spark maintained growth in mobile connections, revenue and average revenue per user (ARPU) over the year, driven by the addition of higher-value customer propositions such as the new shareable Unlimited plan.  

Spark says it has significantly outperformed its mobile market competitors, securing over 60 per cent of total FY19 market growth in service revenue and connections.  

“As customers use their mobile phones to do more, many of them are seeking larger data allowances and price certainty – which provides an opportunity for Spark to improve ARPU with the right products and plans,” says Hodson. 

She says Spark has led the transition to a wireless future with the number of customers on fixed wireless broadband and fixed wireless voice products growing by 36,000 over the year to 166,000.  

“These products are easy to set up and, in many cases, deliver a higher-quality experience for customers transferring from old copper lines, while lowering Spark’s input costs. The future rollout of 5G will enable a step change in our fixed wireless broadband offering.” 

Hodson says Spark is moving fast towards 5G with the November 2018 launch of its innovation lab and collaboration space in Auckland, extensive planning for the network build, and a partnership with Emirates Team New Zealand – which intends to use 5G services from mid-2020 to assist in its defence of the America’s Cup. 

“Spark is gearing up to launch 5G services as soon as relevant spectrum is available," says Hodson.

"We are pleased the Government signalled recently it is considering an early, temporary allocation of some spectrum within the ‘C Band’ earmarked for 5G – as this would enable rapid delivery of 5G services while the details of the longer-term spectrum allocation process are sorted through.” 

In the business sector, Spark says its strengths in digital and cloud services are helping companies transition their current legacy applications and infrastructure to operate effectively in a digital world. As more devices and environments become connected, helping businesses with cybersecurity is increasingly an area of opportunity, it states.

100 ‘bots’

 Spark says it has advanced ongoing programme of simplification, digitisation and automation.

 More than 100 ‘bots’ (automated digital processes) now perform a range of tasks, from running back-end checks and processes to serving customers on the front line and freeing up Spark people. 

High-quality self-service options were experiencing strong usage growth and reducing demand on traditional service channels such as customer care centres, it states. 

Spark App usage increased by 18 per cent, while voice interactions reduced by 34 per cent. .

Spark says it will continue to focus on using technology to understand and anticipate the needs of New Zealanders, applying data-driven insights to every interaction and helping serve customers better, says Hodson.

Justine Smyth and Jolie HodsonCredit: Spark NZ
Justine Smyth and Jolie Hodson

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