"We stood up a streaming platform in record time and made massive investment in our network to ensure we successfully delivered the Rugby World Cup," Spark investors were told in a promo reel ahead of the company's annual meeting in Auckland today.
• Spark vs Sky: how they'll square off beyond the Rugby World Cup
• 5G wars: Analyst sees scenario where Chorus buys 2degrees' network
• Spark shares jump as profit rises
• Streaming Wars: Spark grabs more cricket, Sky extends netball deal
How massive, however, remained a mystery at Spark's annual meeting today.
The telco didn't provide any capex details around its sports streaming push - which has involved everything from rights costs to infrastructure upgrades to streaming platforms, service and support, app development to chipping into TVNZ's production costs - and won't do so until its interim result, expected in February.
In her address to shareholders, chairwoman Justine Smyth also emphasised upgrades that were made to the company's network in the run-up to the RWC. However, she was careful to frame it as "accelerated" infrastructure spending that also served to make the company more competitive in mobile and broadband.
Later, during the Q&A, investor Coralie van Camp said she was worried both Spark and Sky were getting "too aggressive" in the bidding war for sports rights. "Will it be the consumer who will miss out when you over-extend yourselves and to get a return on your investment, you have to charge too much or make a big loss?", she asked.
In response, Smyth played down the impact of the sports rights war.
Spark Sport "is a very small part of our overall business. And any time we bid for rights, we'll be looking for a commercial return," she said.
No costs have been officially disclosed, but a source says Sky paid $400m (plus 5 per cent of its shares) to secure its new Sanzaar deal, and implying that Spark had to pay 50 per cent over the odds to win the 2019 Rugby World Cup (for a rumoured $13m) and domestic cricket.
An unnamed shareholder following the AGM via its webcast asked, "Does Spark have any interest at all in doing something for the many thousands of New Zealanders living in rural areas who have no mobile coverage and sub 1 megabit per second download speeds and are unable to benefit from any of your media offerings."
Value of NZ Rugby's stake in Sky revealed - and a new restriction
After burning $5m in investor's cash, Dropit shapes up for stadium comeback
Hodson replied that under the banner of the Rural Connectivity Group, Spark, Vodafone and 2degrees were working on a public-private project to fill mobile blackspots in rural areas over the next three years.
"So by 2022, there'll be 99.8 per cent population coverage. So it is very much front and centre for us," the Spark boss said.
But beyond those two questions, there were no rumbles about Spark's at-times wobbly RWC effort or the telco's broader push into sports broadcasting.
And with Spark (domestic) and Sky (international) having recently carved up cricket between them, and Sky renewing its netball deal and securing the Tokyo Olympics and NRL not up for grabs until 2023, the sports battle is likely heading into a lull.
Spark chief executive Jolie Hodson told shareholders the telco would fall within its capex guidance for 2020.
And she reaffirmed earnings guidance, as expected, and the forecast 25 cents per share dividend in 2020 (a contrast to Sky, which has suspended its profit payout for an open-ended period) and reiterated that capex would be within forecast).
Hodson and Smythe's steady-as-she-goes message was received well by investors, and shares were up 3c or 0.68 per cent to $4.41 in early afternoon trading. The stock is up 7.16 per cent for the year.
Earlier this week, Spark revealed that it finished the Rugby World Cup with 192,000 Tournament Pass sign-ups.
However, the telco-turned-broadcaster did not reveal any costs (the first details on that front are expected at its interim result in February), not how many were paid vs Spark broadband or mobile customers who qualified for a freebie.
Hodson did offer a mea culpa over the key All Blacks-South Africa clash, where problems with the stream saw Spark make the decision to simulcast the game free on TVNZ from half time.
It was "incredibly disappointing," she told the audience, though also noting the issue was fixed "within 24 hours" and she characterised the tournament as a success overall.
The Spark boss did add it had become apparent that although many homes have fast internet, a lot did not have a good in-home setup. Spark said earlier this week that some 20 per cent of Tournament Pass customers requested help, and that it sent out 500 free wi-fi gadgets and made 150 home visits to sort out more the more complex cases.
First 5G with Nokia, not Huawei
Shareholder Michael Shroff asked, "I would like to know the current state of play viz-a-vis Huawei, given Huawei's deep links with the Chinese Communist Party?"
Hodson replied, "We're currently in the process of vendor selection for the 5G network. We have previously disclosed that we intend to have multiple vendors to be involved in that
"The RFP [request for proposals] is in process, so we can't disclose where we are in terms of that solution, but there is more than one vendor we are working with.
And if you look at Alexandra, where we rolled out our wireless broadband [for a fixed-wireless trial], we worked with Nokia for that rollout."
• Rugby World Cup after-match: Spark Sport reveals some key numbers
• Spark Sport vs TVNZ: Where Spark fell down
• Telstra buys into Southern Cross Cable, diluting Spark's stake
• GCSB gives Vodafone the green light for 5G
Nokia is Vodafone NZ's incumbent for its 4G network, and has already been cleared by the GCSB to supply technology for Vodafone NZ's 5G upgrade, which will go live over 100 cell sites in Auckland, Wellington, Christchurch and Queenstown from December.
Spark's application to upgrade its 5G network with Huawei gear was blocked by the GCSB in November last year. Spark has previously said it can hit its June 1, 2020 deadline for its first 5G service on time and budget using a "multivendor strategy."
Beyond sport and 5G, Spark investors will be keeping an eye on the new Southern Cross Next trans-Pacific cable, now under construction and due to go live in early 2022.
Spark's 50 per cent share in Southern Cross has been diluted to around 40 per cent as Telstra buys into the cable company to part-fund the US$300m Next.
Hodson had already warned at Spark's full-year report that Southern Cross - once such cash cow - will pay no dividend to its owners over the next two years, and that the profit payout will be more modest than before once it does resume.