Vocus sees Rugby World Cup boost in first-half, readies fixed-wireless

Vocus Group director and Vocus chief executive Mark Callander. Photo / Leon Menzies

Vocus

New Zealand was a highpoint for Vocus Group in mixed half-year result for the ASX-listed telco, which saw flat profit overall.

Investors focused on the positive, with shares up 5.4 per cent to A$3.53 in midday trading.

Vocus NZ boss Mark Callander told the Herald that the Rugby World Cup helped to boost his company's fortunes on this side of the Tasman - where its stable includes Orcon, Slingshot and Flip.

The RWC initially caused rancour, as Vocus, Vodafone and 2degrees fell out with Spark over re-sale terms for its Tournament Pass.

But for Vocus at least, it turned out to have a silver lining, "The Rugby World Cup stimulated a lot of people to go out and buy internet-connected TVs," Callander said.

"It was like the 'Netflix effect' when Netflix first launched here." There was a bubble during the World Cup, but those who had upgraded to better internet plans or internet-connected TVs kept consuming more data after the Rugby World Cup.

That contributed to a jump in average revenue per month per user, from a year-ago $69.80 to $73.22 as total broadband connections swelled from 194,000 to 205,000.

And, along with RWC-related infrastructure upgrades helping to spur the company's wholesale business, helped drive a 6 per cent increase in total revenue to $199.6 million, and a 6 per cent rise in underlying earnings to $32.3m.

Callander also credited increased bundling of broadband with mobile phone services (wholesaled from Spark) and power (from Vocus's own energy retailer, Switch).

That saw both business lines enjoy large growth, albeit each of a modest base.

Vocus NZ energy customers increased 31.8 per cent to 29,000 and mobile customers 50.0 per cent to 39,000.

A UFB unbundling partnership with Vodafone continues, as the pair wrestle with Chorus, with the Commerce Commission still in the midst of referring.

Callandar says Vocus NZ undertook an assessment of its mobile virtual network operator MVNO relationship at the end of last year, but ultimately decided to stick with Spark rather than Vodafone on that front.

The wholesale relationship with Spark will be expanded in the second half as Vocus follows Spark into the fixed-wireless market - or using a mobile network to deliver broadband into a home, eliminating the need for a landline.

Vocus will be able to access Spark's 5G service in areas where its network has been upgraded, Callander said - something that was not always a given with Vodafone NZ's MVNO client Kogan Mobile limited to 4G access.

The Vocus NZ boss also want to keep shooting for the higher-end of the UFB fibre market. Orcon recently became the first retail ISP to start selling a plan - the $199/month Orcon 4000 - based on Chorus new Hyperfibre service.

Overall, Vocus Group's first-half net-profit slipped to A$54.4m from $54.6m as total revenue fell 6.9 per cent to US$901.9m on weakness in its Australian retail business, which has been hit by the National Broadband Network (NBN) transition. But costs were down 9 per cent and ebitda increased 1.6 per cent to A$179.3m.