The council-owned company responsible for much of the Canterbury leg of the UFB has reported its first profit, two years ahead of forecast.
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Enable Services made an $11 million net profit for the year to June, against its $4m loss for 2018.
Its fibre rollout wrapped up in June last year, meaning it has been able to take its foot off the cap-ex pedal.
Investors in Chorus (responsible for the UFB in much of the rest of the country have an eye on the further-down-the-track Enable, which can now lean back and watch the cash roll in ... Or at least it could if it did not have mounting debt and, like Chorus, encroaching competition from fixed wireless, a technology that Spark and Vodafone position as a fibre-alternative for a large number of customers.
Revenue increased 23 per cent to $59m as the number of customers on Enable's fibre network increased by 22,000 to 101,000 - or just over half of those within reach (fibre has been rolled past 198,000 homes and businesses).
The network operator says it expects to make $13m on $69m next year.
It's not all roses, however. Enable's debt to its parent, Christchurch City Council, increased from $271m to $291m of its 2019 financial year, and the company says it won't hit peak debt until 2020, with positive cashflow and debt reduction from the following year.
There was controversy when Enable kept on Clearvision - a UFB subcontractor blacklisted by Chorus in June after the Employment Court fined it for underpaying some of its 140 technicians. Enable CEO Steve Fuller told the Herald he preferred to work with the subcontractor to improve its practices than put it out of business. "We do not want to risk people's livelihoods," he said.
Enable began its leg of the public-private UFB rollout in 2012 and finished mid-way through last year, ahead of its official schedule that saw it wrapping up in December this year (Crown Fibre Holdings, now Crown Infrastructure Partners, was bought out in mid-2016).
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Chorus - responsible for the UFB in most of the rest of the country - is still in the midst of the capital-intensive rollout phase.
With its rollout complete (if still around half of premises still to be hooked up from kerb-to-street), Enable has been able to take its foot of the cap-ex pedal, enabling its maiden profit.
"We continue to face strong competition from competing access technologies including copper, hybrid fibre-coaxial and fixed wireless," Enable's annual report notes.
Vodafone NZ operates the hybrid network in question (the cable it inherited from TelstraClear in the capital and Christchurch, now branded UltraFast HFC).
And Spark has made hay over the past couple of years with its fixed wireless offering, which uses its 4G mobile network to deliver broadband into homes. Vodafone NZ says it wants to ramp up its own fixed wireless efforts, particularly as its 5G rollout begins in Auckland, Wellington, Christchurch and Queenstown from December.
Enable's annual report says "we face increased competition from easier to install, but lower-performing, fixed wireless broadband services." (The "lower-performing" tag could be a stretch as Vodafone ramps-up its efforts, with 1Gbit/s to 10Gbit/s connections in the offing once it hits its stride).
And Fuller told the Herald this afternoon, "We're operating in an intensely competitive access market, now and in the future – that includes copper, hybrid fibre-coaxial and 4G fixed wireless. We know this competition will change in time relative to asset lifecycles, including the launch of 5G. Competition overall will remain for the benefit of consumers.
We fundamentally believe that consumers will benefit from being on fibre broadband – with it set to remain the best-performing broadband technology. With this in mind, we will continue to work with our community to connect them to fibre as quickly as possible."
Enable has also had a board refresh recently, with Mark Petrie (who founded an ISP, Snap, then sold it to 2degrees for $28m) signing on as a director in June, replacing Vodafone and Pacific Fibre alumnus Mark Rushworth.
Petrie joins Silicon Valley star turned Wanaka landed gentry Craig Elliott on the company's executive. The Apple alumnus joined the board in 2017.