Chorus chief executive officer JB Rousselot. Photo / Michael Craig
Chorus has revealed a restructure that plays to its push for more rural broadband funding from the Government - and at the same time announced the departure of two senior executives, while a 2degrees veteran has gained more power.
The ultra-fast broadband (UFB, or fibre) network operator will create three business units, which will come into effect in the second quarter of its FY2024 year (the last three months of this calendar year):
Each unit will be headed by a yet-to-be-named general manager (GM), with each of the three GMs reporting to Chorus chief executive officer JB Rousselot.
“It’s good to see Chorus taking rural broadband seriously with the creation of a rural team,” Technology Users Association of New Zealand (Tuanz) chief executive Craig Young told the Herald.
“For many years, they’ve been focused on urban and rural has not had the focus it should have.”
At the same time Mark Aue - who joined Chorus in March as chief financial officer (CFO) - will take a chief operating role that Chorus says has been expanded to include CFO duties.
Aue was 2degrees’ CFO from July 2019 to June 2019, then the telco’s CEO until its merger with Orcon Group midway through last year.
Chief customer officer Ed Hyde and GM of customer and network operations Andy Carroll have their roles “disestablished” with the restructure and have “elected not to pursue new roles created in the new operating model”, Chorus says in an NZX filing. Both will stay on during the transition.
Hyde is an industry veteran who has held senior roles in the industry since the Telecom days, pre-Chorus spin-off.
Carroll’s career also stretches back to the Telecom days, when he was involved in the Gen-i acquisition and the $2.24 billion sale of The Yellow Pages.
Chorus also said that in an internal promotion, Jo Mataira would become its new human resources (HR) head. The incumbent Shaun Philp has taken an HR role at SkyCity, where he’ll start in September.
“With the successful completion of the UFB build, Chorus has laid the foundation for a transformative era. Our new regulatory model empowers us to redefine how we do business, while the dynamic competitive landscape necessitates innovative solutions to meet evolving technologies and customer demands,” Rousselot said in the NZX filing this morning.
The new regulatory regime, introduced after the completion of the UFB rollout last year, includes an annual cap on revenue that Chorus can receive from its fibre business (which will become its only business over the next few years as it gradually decommissions all copper).
Recently, Rousselot has been lobbying to extend the reach of fibre. The rollout that wrapped up in January last year brought fibre within reach of 87 per cent of New Zealand’s population. The Chorus CEO said at the Tuanz Rural Connectivity Symposium last week that, if the Government was willing to chip in, his company could push fibre into more regional and rural areas for 95 per cent coverage - which it says will have both economic and natural disaster resilience benefits.
The Ministry of Business, Innovation and Employment’s Lifting Connectivity in Aotearoa New Zealand strategy document, released in December, included analysis in support of a UFB fibre extension. Any strategy shift by the Government won’t be immediate, however. No additional funds for rural broadband were included in Budget 2023.
Meanwhile, although the original UFB rollout has been completed, around 30 per cent of properties have yet to connect to the fibre that now runs past their letterbox.
In April, Chorus apologised to customers in Northland, Coromandel, Rotorua, Taupō, Whakatāne, Marlborough, Blenheim, Balclutha, Waikouaiti, and Ranfurly for a wait time of up to 10 weeks for a fibre install. The company, which had faced a delay for telco technicians to be added to the “Green List” for fast-track visas, said it was 200 staff short.
Tuanz CEO Craig Young told the Herald that more fibre would help, but that it was only part of the solution.
“The drive to push fibre further out to more people is welcomed because it brings the newer fixed technology to more people, giving more choice and competition to those communities,” Young said.
“However, it is off the back of Chorus’ announcement last week that they want to shut down their copper network within 10 years, and fibre will not make it to all those currently connected to the legacy system.
“So while Chorus can push for more fibre, they also need to be working with other technology providers to ensure no one is worse off or dropped off for a service.”
The Government recently confirmed a quid pro quo arrangement that saw Spark, 2degrees and One receive 5G spectrum at no cost in return for pledges to spend an extra $24 million on expanding mobile and fixed-wireless broadband coverage in the regions.
Chorus shares closed Monday at $8.25. The stock is up 13.6 per cent over the past year.
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