Spark CEO Jolie Hodson on Capex reduction and other achievements

Spark New Zealand CEO Jolie Hodson has explained how the telecom will be able to cut its Capex during fiscal 2020.
Spark New Zealand CEO Jolie Hodson
The telecom operator’s Capex will be reduced by $50 million to $370 million during fiscal 2020 against $417 million in fiscal 2019 and $413 million in fiscal 2018 – despite planning 5G investment.

Spark, however, said its capital expenditure will be between 11 percent and 12 percent of operating revenues.

“Spark is gearing up to launch 5G services as soon as spectrum is available. Government signalled recently it is considering an early, temporary allocation of some spectrum within the C Band earmarked for 5G,” Jolie Hodson said during earnings report.

Jolie Hodson became CEO of Spark on 1 July 2019. Prior to that, Jolie Hodson was Spark’s customer director. Jolie joined Spark in 2013 as CFO before becoming CEO Spark Digital in October 2016.

Spark spent $63 million on plant, network, core sustain and resiliency, $132 million on IT systems, $118 million on mobile network, $36 million on Cloud, $31 million on converged communications network and $12 million on international cable construction and capacity during the fiscal.

The focus of Spark was on the completion of single RAN deployment, site densification to deliver more capacity and prepare for RWC and 5G, and a major refresh of Spark’s mobile core technology.

The company said investment in the multi-year converged communications network (CCN) program peaked in FY18 and FY19 to progress decommissioning of Spark’s PSTN network and deployment of a new voice core.

Spark said its IT investment is expected to decrease by between 10 percent and 15 percent in-line with ongoing shift in software-as-a-service expenditure away from capital expenditure to operating expenses.

Spark will also reduce fixed network investment through a combination of smart architectural choices and more cost efficient technologies.

Spark said its operating revenues at $3,533 million were flat year-on-year, as growth markets (mobile, broadband, cloud and security) were offset by expected declines in legacy voice and managed data & networks products. EBITDAI rose 11.1 percent to $1,090 million.

Spark said the number of customers on fixed wireless broadband and fixed wireless voice products grew by 36,000 over the year to 166,000.

Spark advanced its program of simplification, digitisation and automation – with more than 100 automated digital processes now performing a range of tasks, from running back-end checks and processes to serving customers on the front line.

Spark App usage increased by 18 percent, while voice interactions reduced by 34 percent.