Spark New Zealand said it will invest more in data centers and its 5G business over the next three years as part of a new strategy.
The company will spend NZ$250 million ($157.78 million) to NZ$300 million in the data center market until fiscal 2026, and between NZ$40 million and NZ$60 million in the 5G business.
At present, Spark has 16 data centers nationally. Spark is currently investing to expand capacity. In future, Spark aims to increase investment in high-growth data center market.
At present, Spark has investment in copper, fibre and wireless connectivity infrastructure. In future, Spark aims to shift from traditional connectivity to software defined networking (SDN).
Spark and several other regional telcos have been looking to reduce their reliance on physical towers and boost their technology with investments on digital infrastructure and data centers.
In July last year, Spark sold a 70 percent stake in its towers business for NZ$900 million to Canadian investment firm Ontario Teachers’ Pension Plan Board.
In its interim financial report for fiscal 2023, Spark noted that the expansion of its Takanini data center was expected to complete in the second half of the year. Spark invested NZ$50 million in its data centers business in the first half of fiscal 2023.
In February, Spark said it had allocated NZ$350 million of proceeds from the sale of its towers to invest in digital infrastructure, data centers and emerging technologies, with about NZ$90 million to NZ$110 million earmarked for fiscal 2023.
“Over the next three years, we will invest $250-$300 million in the high-growth data centre market and $40-$60 million in 5G Standalone, which will open up opportunities across our core markets of mobile and broadband, while underpinning growth into new high-tech solutions,” Spark CEO Jolie Hodson said.
Spark will leverage its data capability and 5G investments to deliver the latest digital experiences, personalized for its customers.
The telecom operator has dual brands of Spark and Skinny to serve different ends of the price spectrum. Spark management believes it has the unique ability to target the right product to the right customer at the right time through data, and 5G coverage is densifying. “This sets us up to continue to grow value in mobile and to move wireless broadband towards 35 percent of our base by the end of FY26,” Jolie Hodson said.