2degrees' US owner has reported a wider net loss for its September quarter.
The Seattle-based, Toronto-listed Trilogy International Partners made a net loss of US$23.0 million ($31.6m) against a US$5.1m loss in the year-ago period.
Revenue declined from US$160.5m to $153.7m.
Long-term debt increased its long shadow over the company, from the year-ago US$528.7m to US$567.9m.
Trilogy has two assets: its 73 per cent stake in 2degrees, and a 72 per cent holding in Bolivia's NeuvaTel (trading as Viva), which holds a roughly similar market position to the Kiwi telco.
The three months to September 30 saw 2degrees continue to return solid results.
But NuevaTel continued to struggle as the government of politically unstable, Covid-swamped Bolivia awarded its citizens a "payment holiday" from phone bills.
2degrees insiders have long complained that its Bolivian sibling is a drag on the group. In an October market filing, Trilogy said it had secured consent from investors to put its majority stake in NeuvaTel on the block.
For the September quarter, Neuvatel's adjust ebditda declined 95 per cent to US$0.5m as revenue crashed 28 per cent US$36.3m.
Trilogy said between April and September, two government mandates - the first providing an effective "payment holiday," the second free "lifeline" plans for customers who had missed payments on two or more bills had hurt it in the Central American state.
And it conceded in a market filing today that "There is uncertainty as to when customer behaviour in Bolivia will return to historic norms."
Downunder, things are brighter.
"We are pleased with our continued momentum in New Zealand," Trilogy president and 2degrees chairman Brad Horwitz said.
Trilogy's Kiwi operation saw ebitda rise 14 per cent against the year-ago quarter to US$3.4m (excluding a 2 per cent currency exchange benefit) as the number of 2degrees mobile customers on monthly contracts (which yield much more than pre-pay) climbed 8 per cent to a "Postpaid subscriber base nearing 500,000 including over 100,000 business subscribers."
2degrees' mobile service revenue edged up from US$66.1m to $US68m for the quarter, while fixed-line broadband jumped 25 per cent (albeit off a low base) to $22m. The carrier's landline broadband service - relatively low-profile up to now - has been the focus of a new campaign featuring returning pitchman Rhys Darby.
2degrees now has 128,500 fixed-line customers, putting it fourth in the market, ahead of Trustpower (which recently reported 106,000 power customers on broadband bundles), but behind Orcon and Slingshot owner Vocus (around 225,00), Vodfone NZ (around 420,000) and Spark (around 700,000).
In mobile, 2degrees finished the quarter with 1.47m customers with the aforementioned 8 per cent jump in contract customers (Spark and Vodafone are both around the 2.5m mark)
The quarter saw also 2degrees's capex decline $4.9m, mainly attributable to the deferral of capital projects due to Covid-19," and marketing costs fall $1.5m or 10 per cent amid cost controls "to mitigate anticipated financial impacts of the pandemic."
(2degrees full financials are reported to the Companies Office annually, with its financial year coinciding with the calendar year; see below for its 2019 result.)
Bond issue, Bolivian sale should provide funds for 5G
2degrees lag rivals Vodafone and Spark in 5G, with the GCSB having sidelined Huawei - which was both its incumbent technology provider (with 4G) and its most obvious source of funding (with vendor-financing for its mobile upgrade.)
However, chief executive Mark Aue recently said the telco is now in talks with alternative 5G vendors for a mobile network upgrade that will begin next year.
The telco's 5G rollout should start "by late next year," corporate affairs director Mat Bolland told the Herald.
The government has already come to the party by cancelling its 5G auction in favour of directly-allocating 5G spectrum at low-cost (albeit on a temporary basis; a full-blooded auction will follow toward the end of next year when it's anticipated an iwi claim on airwaves will be settled).
And in October Trilogy staged a US$50m debt issue, with funds form the bonds earmarked, in part, for 2degrees' 5G upgrade.
The Herald understands proceeds from a NeuvaTel sale - or at least part of it - would also help fund 2degrees' mobile upgrade.
Postscript: 2degrees' most recent full-year numbers
2degrees' pre-tax profit rose 46 per cent to $28.6 million for its 2019 financial year - which coincides with the calendar year. Statutory net profit was $86.3m thanks to a $57.6m tax credit on previous years' tax loses.
Ebitda was up 12 per cent to $147.5m.
Service revenue increased 4.5 per cent to $512m, but overall revenue dropped 9.7 per cent to $727.8m as a low-margin exclusive handset deal with Noel Leeming was phased out.