Telecom operator Spark New Zealand said its capital expenditure (excluding spectrum) for fiscal year 2023 will be ~$410 million.
Spark’s 5G was live in 21 locations across the country. Spark’s Takanini data centre expansion is over 85 percent contracted and on track for completion in 2023. Spark did not reveal further details about its 5G network expansion.

Capital expenditure excluding mobile spectrum has touched $410 million in fiscal 2022 as compared with $349 million in fiscal 2021.

Capex of Spark touched $150 million in IT Systems, $125 million in Mobile network, $53 million in Core sustain and resiliency, $31 million in Data centres, $22 million in Converged Communications Network (CCN), $15 million in Cloud and $7 million in International cable construction and capacity.

Spark is making investment in mobile core and Radio Access Network (RAN) delivering greater network capacity and coverage. Spark is spending on IT systems in support of implementation of first phase of Spark ERP system replacement. Spark is also increasing investment in Optical Transport Network 2.0 (OTN) upgrade.

Spark is making investment in Converged Communication Network, advancing exit strategy of legacy PSTN network.

Spark said growth Capex in FY22 was $56 million for the acceleration of 5G roll-out with an additional $25 million invested in FY22, modernization of Mayoral Drive exchange and the commencement of data center expansion at Takanini. FY23 growth Capex is expected to be ~$50-$60 million.

SPARK REVENUE

Spark said revenue rose 3.5 percent to $3.720 billion in fiscal 2022, driven by mobile business and wins in Spark Health.

Mobile service revenue grew 5.5 percent, as data-driven marketing supported ~13 percent increase in customers on Endless plans, and pay-monthly, pre-paid, and business connections grew steadily.

Spark broadband has 704,000 customers, in line with its strategy to maintain market leadership. While this drove a 4.6 percent revenue decline to $639 million, wireless broadband connection growth of 16,000 helped to offset this impact through avoided input costs.

Cloud, security, and service management revenues grew 0.7 percent to $446 million, impacted by Covid lockdowns, transformation project delays, supply chain disruption, and some execution challenges.

Spark IoT revenue increased 22 percent as connections climbed 75 percent to 832,000, while Spark Health revenue increased 46 percent, supported by new national contract wins.

Free cash flow was $296 million, impacted by advanced purchasing of inventory and capital expenditure items to mitigate supply chain disruption risks and the related impact on working capital.

Spark CEO Jolie Hodson said: “We have returned to revenue growth with a market-leading result in mobile and our growth markets of IoT and digital health accelerating. We stabilised our broadband base and are on track to deliver our FY23 target of ~30 percent of our customers on wireless, reaching ~28 percent by the end of the financial year.”

“We are a simpler and more digital organization, with 102 mobile and broadband plans retired and digital journeys increasing by 23 percent. Our data and AI-driven marketing capability enabled us to predict the needs of ~90 percent of Spark customer households, increasing conversion by 19 percent.”

In July, Spark announced its agreement to sell 70 percent stake in its TowerCo business to the Ontario Teachers’ Pension Plan (OTPP). Spark expects net cash proceeds4 of ~$900 million at completion in the first half of FY23.