1 00:00:03,480 --> 00:00:03,920 Speaker 1: Kiota. 2 00:00:04,400 --> 00:00:07,640 Speaker 2: Welcome to Shared Lunch, brought to you by Shares's. My 3 00:00:07,760 --> 00:00:10,200 Speaker 2: name is Susanna Batley and I'm the general manager of 4 00:00:10,200 --> 00:00:14,760 Speaker 2: Shares's business. In today's episode, we'll be talking to Mark Owah, 5 00:00:15,240 --> 00:00:19,520 Speaker 2: CEO of Chorus. We'll be talking about the huge potential 6 00:00:19,760 --> 00:00:23,040 Speaker 2: that digital infrastructure can offer our tetoa, as well as 7 00:00:23,079 --> 00:00:26,560 Speaker 2: what's next for the talco. Before we get started, though, 8 00:00:26,800 --> 00:00:28,280 Speaker 2: here are some important information. 9 00:00:28,960 --> 00:00:32,040 Speaker 3: Investing involves risk you might lose the money you start with. 10 00:00:32,320 --> 00:00:36,080 Speaker 3: We recommend talking to a licensed financial advisor. We also 11 00:00:36,120 --> 00:00:40,040 Speaker 3: recommend reading product disclosure documents before deciding to invest. Everything 12 00:00:40,120 --> 00:00:42,159 Speaker 3: you're about to see and here is current at the 13 00:00:42,200 --> 00:00:42,959 Speaker 3: time of recording. 14 00:00:43,440 --> 00:00:43,559 Speaker 4: Hi. 15 00:00:43,680 --> 00:00:44,840 Speaker 1: Mark, welcome to Shared Lunch. 16 00:00:45,479 --> 00:00:46,760 Speaker 4: Thanks you, Sanna, thanks for having me. 17 00:00:47,040 --> 00:00:49,760 Speaker 2: I'm really excited to get into this conversation about Chorus, 18 00:00:50,240 --> 00:00:52,400 Speaker 2: but before we do that, I'd like to start with 19 00:00:52,479 --> 00:00:55,720 Speaker 2: you back. You've had over two decades in the industry 20 00:00:55,880 --> 00:00:59,920 Speaker 2: across the UK, Australia and are Tetoa, and you've also 21 00:01:00,040 --> 00:01:03,360 Speaker 2: had previous roles as CEO of Two Degrees as well 22 00:01:03,400 --> 00:01:06,080 Speaker 2: as CFO of voteraphone New Zealand which is now one 23 00:01:06,160 --> 00:01:10,080 Speaker 2: New Zealand. So what first attracted you to the sector, 24 00:01:10,440 --> 00:01:11,920 Speaker 2: and why have you stayed there so long? 25 00:01:12,880 --> 00:01:16,920 Speaker 4: It's fast paced. I enjoy technology and I enjoy change, 26 00:01:16,959 --> 00:01:20,240 Speaker 4: but I think what's really kept me in the industry, 27 00:01:20,319 --> 00:01:23,600 Speaker 4: both overseas and coming back home to New Zealand is 28 00:01:23,600 --> 00:01:28,360 Speaker 4: that ability of connectivity to truly shape and enable better futures. 29 00:01:28,480 --> 00:01:30,800 Speaker 4: And it's helping to shape the way that we live 30 00:01:30,880 --> 00:01:33,880 Speaker 4: from an intergenerational impact, and I love that generally for 31 00:01:33,920 --> 00:01:34,280 Speaker 4: the better. 32 00:01:34,480 --> 00:01:37,679 Speaker 2: You'd say quite a few people that have worked at 33 00:01:37,680 --> 00:01:40,560 Speaker 2: two degrees talked about how much you took that purpose 34 00:01:41,319 --> 00:01:45,920 Speaker 2: approach to the organization two degrees obviously in the B 35 00:01:45,959 --> 00:01:48,520 Speaker 2: two C space in the retail space. How does that 36 00:01:48,600 --> 00:01:51,639 Speaker 2: change being at Chorus and as a B to B player? 37 00:01:52,720 --> 00:01:55,720 Speaker 4: Yeah, look, I mean purpose for cause is something I'm 38 00:01:55,760 --> 00:01:59,800 Speaker 4: really personally passionate about. I have five children, so I've 39 00:02:00,400 --> 00:02:02,320 Speaker 4: I want to leave this place in a better state 40 00:02:02,560 --> 00:02:05,120 Speaker 4: than when I joined it. And two degrees was such 41 00:02:05,120 --> 00:02:07,520 Speaker 4: an amazing place to be able to put that foundation 42 00:02:07,800 --> 00:02:10,799 Speaker 4: of a core purpose in there, and that was around 43 00:02:10,800 --> 00:02:12,799 Speaker 4: fighting for fear to make New Zealand a better place 44 00:02:12,840 --> 00:02:15,600 Speaker 4: to live, and that was the key challenge that decisions 45 00:02:15,600 --> 00:02:17,920 Speaker 4: that the business was taking If it wasn't making New 46 00:02:17,960 --> 00:02:20,000 Speaker 4: Zealand a better place to live, then we should stop it. 47 00:02:20,639 --> 00:02:23,560 Speaker 4: And that's the whole beauty of purpose when it actually 48 00:02:23,600 --> 00:02:27,080 Speaker 4: builds some momentum and that you can truly drive positive 49 00:02:27,200 --> 00:02:30,240 Speaker 4: societal outcomes. And so we're trying to do the same 50 00:02:30,240 --> 00:02:35,079 Speaker 4: thing in Chorus now, but albeit coming from a slightly 51 00:02:35,120 --> 00:02:40,240 Speaker 4: different perspective, and we talked about unleashing potential through creativity 52 00:02:40,480 --> 00:02:44,320 Speaker 4: and enabling better futures for altiet Or and again I 53 00:02:44,320 --> 00:02:46,280 Speaker 4: think that goes back to my view of what's kept 54 00:02:46,320 --> 00:02:49,080 Speaker 4: me in the industry as well, and being able to 55 00:02:49,280 --> 00:02:53,000 Speaker 4: improve lives and help shape them for future generations. And 56 00:02:53,000 --> 00:02:54,480 Speaker 4: whether you're in a B two C or in you're 57 00:02:54,480 --> 00:02:57,360 Speaker 4: a B to B space, that the ability of large 58 00:02:57,520 --> 00:03:01,040 Speaker 4: enterprise to actually drive positive society or outcome is really material. 59 00:03:02,800 --> 00:03:06,079 Speaker 2: And the origins of Chorus was that it was originally 60 00:03:06,080 --> 00:03:09,280 Speaker 2: spun out of Telecom, which for those old enough like 61 00:03:09,360 --> 00:03:12,240 Speaker 2: myself remember as the former Spark. 62 00:03:13,280 --> 00:03:14,200 Speaker 1: Could you talk a bit. 63 00:03:14,080 --> 00:03:18,440 Speaker 2: About why Corus started, why it was spun out of 64 00:03:18,840 --> 00:03:21,440 Speaker 2: Spark or Telecom back then, and then also a bit 65 00:03:21,480 --> 00:03:22,480 Speaker 2: about the business today. 66 00:03:23,000 --> 00:03:26,840 Speaker 4: Sure, I mean you go back to two thousand and 67 00:03:26,919 --> 00:03:30,320 Speaker 4: eight and that's where the first proposals were to bring 68 00:03:30,800 --> 00:03:34,640 Speaker 4: high speed fiber connectivity to the majority of New Zealand. 69 00:03:35,240 --> 00:03:37,920 Speaker 4: And back then you'd recognize there was a fair amount 70 00:03:37,960 --> 00:03:40,880 Speaker 4: of pushback to doing this, but you actually had a 71 00:03:40,920 --> 00:03:44,680 Speaker 4: small group of visionaries that really pushed for that change 72 00:03:45,040 --> 00:03:47,440 Speaker 4: and had the courage and the persistence to keep doing 73 00:03:47,440 --> 00:03:50,520 Speaker 4: it when actually very few markets or countries around the 74 00:03:50,520 --> 00:03:53,800 Speaker 4: world were even doing that. And it was premised on 75 00:03:54,160 --> 00:03:58,160 Speaker 4: creating an open access platform and network built off a 76 00:03:58,240 --> 00:04:01,040 Speaker 4: public and private partnership, which I think we could all 77 00:04:01,080 --> 00:04:04,560 Speaker 4: recognize now and looking back that this is probably one 78 00:04:04,560 --> 00:04:08,920 Speaker 4: of the most successful examples of private and public working 79 00:04:08,960 --> 00:04:13,560 Speaker 4: together in partnership to deliver now what is an amazing 80 00:04:13,600 --> 00:04:16,400 Speaker 4: network by global standards, and we bat well above our weight, 81 00:04:16,480 --> 00:04:20,400 Speaker 4: you would say from a New Zealand perspective, You're right. 82 00:04:20,440 --> 00:04:23,000 Speaker 4: It was spun out of Telecom, as it was for 83 00:04:23,040 --> 00:04:26,160 Speaker 4: those old enough, and I certainly am, but that was 84 00:04:26,240 --> 00:04:29,360 Speaker 4: essentially so that Telecom could actually compete as part of 85 00:04:29,400 --> 00:04:33,120 Speaker 4: the UFB, the Ultra Fast Broadband Initiative, and so it 86 00:04:33,200 --> 00:04:35,480 Speaker 4: spun off the retail arm which we know today is 87 00:04:35,520 --> 00:04:40,760 Speaker 4: now Spark and the wholesale arm of actually building, running, managing, 88 00:04:40,839 --> 00:04:45,640 Speaker 4: maintaining the fiber networks into what we see as chorus today, 89 00:04:46,520 --> 00:04:49,480 Speaker 4: you know, and that's where we see ourselves today from 90 00:04:49,520 --> 00:04:52,040 Speaker 4: a retail to a wholesale perspective. We are the wholesale 91 00:04:52,080 --> 00:04:56,080 Speaker 4: partner of the fiber network and also copper, but we're 92 00:04:56,080 --> 00:05:00,320 Speaker 4: getting out of copper. Fiber is the gold standard that 93 00:05:00,640 --> 00:05:05,120 Speaker 4: you would look to. But our roles around that ongoing investment, maintenance, 94 00:05:05,240 --> 00:05:08,920 Speaker 4: running the network, working with the retail service providers the 95 00:05:09,080 --> 00:05:13,000 Speaker 4: RSPs as they're known, to provide the products, the plans 96 00:05:13,120 --> 00:05:16,640 Speaker 4: and the network essentially that they then are selling into 97 00:05:16,680 --> 00:05:18,600 Speaker 4: market from a retail perspective. 98 00:05:20,440 --> 00:05:24,480 Speaker 2: And just going into those retail sellers or resellers that 99 00:05:24,520 --> 00:05:28,200 Speaker 2: you work with, you've obviously worked for them before running 100 00:05:28,279 --> 00:05:30,960 Speaker 2: running through degrees and at votafone New Zealan or one 101 00:05:31,000 --> 00:05:35,279 Speaker 2: New Zealand, as we mentioned at the start, do you 102 00:05:35,320 --> 00:05:37,599 Speaker 2: see them just as partners or are they starting to 103 00:05:37,640 --> 00:05:38,839 Speaker 2: become competition as well? 104 00:05:38,839 --> 00:05:40,640 Speaker 1: How does that dynamic dynamic work? 105 00:05:40,720 --> 00:05:43,480 Speaker 4: Well, look, competition is definitely alive and well I think 106 00:05:43,560 --> 00:05:47,560 Speaker 4: you know where today we have five G fixed wireless 107 00:05:48,279 --> 00:05:51,200 Speaker 4: and five G is a very different product to four 108 00:05:51,279 --> 00:05:57,120 Speaker 4: G from a wireless broadband perspective, and that's there's competition 109 00:05:57,240 --> 00:06:00,880 Speaker 4: in market now for some of those fiber customers. And 110 00:06:01,480 --> 00:06:03,440 Speaker 4: you know, to be clear, there is a market for 111 00:06:03,520 --> 00:06:06,479 Speaker 4: multiple broadband technologies. You know, we're seeing that advent with 112 00:06:06,600 --> 00:06:11,440 Speaker 4: Starlink and the Leo satellites as well and the exit 113 00:06:11,480 --> 00:06:17,120 Speaker 4: progressively from data legacy copper technology. But yeah, they are 114 00:06:17,160 --> 00:06:20,040 Speaker 4: our partners, We work with them, we work through them 115 00:06:20,080 --> 00:06:25,039 Speaker 4: to actually grow our own fiber customer base. But equally, yes, 116 00:06:25,160 --> 00:06:26,880 Speaker 4: recognizing they are also competitors. 117 00:06:28,320 --> 00:06:30,760 Speaker 2: A Deloitte report earlier this year say to that the 118 00:06:30,760 --> 00:06:33,440 Speaker 2: digital fiber network has the potential to bring in thirty 119 00:06:33,480 --> 00:06:36,200 Speaker 2: three point two billion dollars to the New Zealand economy 120 00:06:36,240 --> 00:06:40,320 Speaker 2: by twenty thirty three. What do you see the potential 121 00:06:40,360 --> 00:06:43,080 Speaker 2: barriers to us being able to realize this sort of 122 00:06:43,120 --> 00:06:45,479 Speaker 2: benefit on the scale. 123 00:06:45,960 --> 00:06:49,360 Speaker 4: Yeah, and it was a great report from Deloitte. And 124 00:06:49,839 --> 00:06:52,839 Speaker 4: actually that thirty three billion dollars by twenty thirty three 125 00:06:52,920 --> 00:06:55,080 Speaker 4: is just the annual benefit. You know, when you're actually 126 00:06:55,080 --> 00:06:58,880 Speaker 4: looking at the cumulative benefit between now out to twenty 127 00:06:58,920 --> 00:07:01,880 Speaker 4: thirty three, is that over one hundred and sixty billion 128 00:07:01,960 --> 00:07:04,839 Speaker 4: dollars of economic benefit. And I think again that's a 129 00:07:04,880 --> 00:07:08,320 Speaker 4: testament to that vision back in two thousand and eight 130 00:07:08,360 --> 00:07:11,920 Speaker 4: to actually bring this network to New Zealand. You know 131 00:07:11,920 --> 00:07:14,400 Speaker 4: some of those barriers, So the first is probably around 132 00:07:14,400 --> 00:07:17,280 Speaker 4: coverage an expansion of fiber. So today we sit it 133 00:07:17,440 --> 00:07:20,560 Speaker 4: just over eighty seven percent of our population that are 134 00:07:20,600 --> 00:07:25,720 Speaker 4: covered by fiber, so thirteen percent the country aren't. We'd 135 00:07:25,760 --> 00:07:29,520 Speaker 4: see a definite use case to grow that fiber expansion 136 00:07:29,520 --> 00:07:32,360 Speaker 4: out to ninety five percent. Because of New Zealand's topography 137 00:07:32,400 --> 00:07:36,680 Speaker 4: and geographic dispersion of the population. Probably doesn't you know, 138 00:07:36,720 --> 00:07:40,200 Speaker 4: the economics don't work beyond ninety five percent. But actually 139 00:07:40,320 --> 00:07:42,840 Speaker 4: that's one of the leaders and drivers to getting to 140 00:07:43,280 --> 00:07:46,240 Speaker 4: recognize that economic benefit is being able to expand it. 141 00:07:46,960 --> 00:07:50,720 Speaker 4: Today New Zealand ranks seventeenth in the world for fiber uptake, 142 00:07:50,760 --> 00:07:53,080 Speaker 4: which is quite an amazing stat for a country with 143 00:07:53,240 --> 00:07:55,960 Speaker 4: five million people. And again the topography that we have 144 00:07:56,080 --> 00:07:59,440 Speaker 4: to actually build this network, but we've got to stay 145 00:07:59,440 --> 00:08:02,200 Speaker 4: at the fore of that. You know, those visionaries put 146 00:08:02,280 --> 00:08:04,800 Speaker 4: us out there when other countries and markets really weren't 147 00:08:04,800 --> 00:08:07,720 Speaker 4: looking at this. You know, that same ranking, if you 148 00:08:07,760 --> 00:08:10,760 Speaker 4: compare that to Australia are at fifty fifth the UK 149 00:08:10,880 --> 00:08:13,240 Speaker 4: at sixty six, so it's nice to be on the 150 00:08:13,920 --> 00:08:17,200 Speaker 4: right side of those for a change. But expansion is one, 151 00:08:17,600 --> 00:08:22,000 Speaker 4: digital equities another, so ensuring that no one's really left 152 00:08:22,000 --> 00:08:27,560 Speaker 4: behind from this digital world today, the government statistics which 153 00:08:27,680 --> 00:08:30,880 Speaker 4: would estimate one in five people across our sed or 154 00:08:31,040 --> 00:08:35,320 Speaker 4: are actually digitally excluded, which is roughly about ten percent 155 00:08:35,360 --> 00:08:39,560 Speaker 4: of households. That seems like a staggering statistic, particularly when 156 00:08:39,600 --> 00:08:44,600 Speaker 4: you consider that that we're increasingly becoming more digitized, so 157 00:08:45,200 --> 00:08:48,600 Speaker 4: services like core government or retail services or access to 158 00:08:48,640 --> 00:08:52,960 Speaker 4: health services that are becoming increasingly digitized, So the risk 159 00:08:53,040 --> 00:08:56,640 Speaker 4: to being digitally excluded is probably is growing, if anything. 160 00:08:57,320 --> 00:08:59,360 Speaker 4: So I think those are the two key ones in 161 00:08:59,360 --> 00:09:04,360 Speaker 4: the third odd call loud as having appropriate regulation, whether 162 00:09:04,440 --> 00:09:08,960 Speaker 4: that's too new products like fiber or it's too legacy products, 163 00:09:09,000 --> 00:09:10,960 Speaker 4: and being able to have a pathway to exit from 164 00:09:11,000 --> 00:09:15,560 Speaker 4: those like copper. You know, a regulatory frameworks need to 165 00:09:16,120 --> 00:09:21,400 Speaker 4: encourage investment and promote competition, not stifle it. So and 166 00:09:21,400 --> 00:09:23,200 Speaker 4: I think we've got some work to do in that space. 167 00:09:24,480 --> 00:09:26,840 Speaker 2: Yeah, great, and I'd like to circle back on those, 168 00:09:27,880 --> 00:09:30,760 Speaker 2: you know, on that question whether the regulatory framework is 169 00:09:30,760 --> 00:09:34,120 Speaker 2: appropriate right now. But on those first two points, on 170 00:09:34,480 --> 00:09:37,320 Speaker 2: ensuring that the economics work to increase that coverage to 171 00:09:37,640 --> 00:09:40,559 Speaker 2: whether it's ninety five percent or whatever that number is, 172 00:09:41,400 --> 00:09:45,520 Speaker 2: and also that social equity point, how do you think 173 00:09:45,600 --> 00:09:50,439 Speaker 2: about about those economics, because you know, with a new subdivision, 174 00:09:50,480 --> 00:09:52,959 Speaker 2: for example, I imagine that the economics can look really 175 00:09:53,000 --> 00:09:56,240 Speaker 2: good because, as I understand it, most of the cost 176 00:09:56,360 --> 00:09:59,719 Speaker 2: of installation is in thinking those trenches and putting that 177 00:09:59,760 --> 00:10:03,040 Speaker 2: PI in. And with a new development, you're already doing 178 00:10:03,080 --> 00:10:07,000 Speaker 2: that with electricity and plumbing and all those other infrastructural 179 00:10:07,040 --> 00:10:11,200 Speaker 2: requirements that that that new that new dwelling requires. And 180 00:10:11,240 --> 00:10:15,160 Speaker 2: also you're probably getting high connectivity rates as well with 181 00:10:15,320 --> 00:10:18,160 Speaker 2: a new development like that if you compare it to 182 00:10:18,320 --> 00:10:21,760 Speaker 2: say to a small rural town where you might get 183 00:10:21,800 --> 00:10:26,280 Speaker 2: lower connection rates, and also the cost is higher the 184 00:10:26,360 --> 00:10:29,720 Speaker 2: marginal cost, because you're having to dig up and do that. 185 00:10:30,800 --> 00:10:34,280 Speaker 2: But obviously, to your point, from a social equity point 186 00:10:34,280 --> 00:10:35,920 Speaker 2: of view, it's really really important. 187 00:10:35,559 --> 00:10:36,640 Speaker 1: That people are connected. 188 00:10:36,720 --> 00:10:41,600 Speaker 2: And given those second order effects, as we're distributing healthcare 189 00:10:41,640 --> 00:10:45,160 Speaker 2: and all these other services digitally, how do you think 190 00:10:45,160 --> 00:10:48,040 Speaker 2: about that and how do you sort of balance those objectives. 191 00:10:49,400 --> 00:10:52,640 Speaker 4: Yeah, so from a new subdivision development. So we think 192 00:10:52,640 --> 00:10:55,120 Speaker 4: about that as MPD is our new property development and 193 00:10:55,160 --> 00:11:00,000 Speaker 4: it's something that that that we work well in across News. 194 00:11:00,040 --> 00:11:03,400 Speaker 4: The only all the fiber areas that Chorus is involved in, 195 00:11:03,600 --> 00:11:06,680 Speaker 4: and you're you're absolutely right where the fiber is already existing. 196 00:11:06,679 --> 00:11:10,559 Speaker 4: And that's the Beau beauty of fiber and why it's 197 00:11:10,600 --> 00:11:13,000 Speaker 4: so scalable because you're not having to go out and 198 00:11:13,080 --> 00:11:15,840 Speaker 4: dig up the trenches and change out all the infrastructure 199 00:11:15,840 --> 00:11:18,880 Speaker 4: every five to ten years. It's actually changing out the 200 00:11:18,880 --> 00:11:21,440 Speaker 4: equipment at either end. So thinking about the exchanges at 201 00:11:21,480 --> 00:11:24,280 Speaker 4: one end and the exchange cards, things that become their 202 00:11:24,280 --> 00:11:27,200 Speaker 4: neighbors or in our homes, our households now where we 203 00:11:27,240 --> 00:11:29,560 Speaker 4: have the little white box on the wall wherever it 204 00:11:29,640 --> 00:11:33,360 Speaker 4: might be, and that's called the ANTS, the optical network terminal. 205 00:11:33,480 --> 00:11:36,920 Speaker 4: So it's really scalable and that's the beauty of fiber. 206 00:11:37,520 --> 00:11:41,720 Speaker 4: But the costs of delivering fiber when you move outside 207 00:11:41,760 --> 00:11:46,240 Speaker 4: those fiber areas and you're building new infrastructure, they become 208 00:11:46,640 --> 00:11:50,560 Speaker 4: exponentially greater. And you know, you can think about an 209 00:11:50,679 --> 00:11:54,439 Speaker 4: urban example and maybe take my street as an example 210 00:11:54,520 --> 00:11:56,840 Speaker 4: and say there's fifty homes in the street and they 211 00:11:56,880 --> 00:11:58,640 Speaker 4: all have a three meter set back from the road. 212 00:12:00,320 --> 00:12:03,320 Speaker 4: We can have a high degree of confidence around the 213 00:12:03,360 --> 00:12:06,120 Speaker 4: costs of those and think about the uptake as well. 214 00:12:07,000 --> 00:12:10,520 Speaker 4: In a rural context, though that same kind of area 215 00:12:10,640 --> 00:12:13,960 Speaker 4: might have one premise and it's five hundred meters set 216 00:12:14,000 --> 00:12:17,480 Speaker 4: back from the road, And as great as fiber is, 217 00:12:17,920 --> 00:12:22,560 Speaker 4: it's these things still cost so that the exponential rate 218 00:12:23,080 --> 00:12:25,880 Speaker 4: of cost versus the returns that we're getting, those economics 219 00:12:25,880 --> 00:12:29,400 Speaker 4: actually become a lot less attractive to do that, which 220 00:12:29,440 --> 00:12:31,839 Speaker 4: is why we then try to work with government around 221 00:12:32,120 --> 00:12:36,760 Speaker 4: new frameworks that would either mirror or evolve from the 222 00:12:36,800 --> 00:12:41,000 Speaker 4: original UFB program to actually take fiber further, maybe to 223 00:12:41,040 --> 00:12:45,560 Speaker 4: that ninety five percent of the population, and interesting at 224 00:12:45,559 --> 00:12:50,000 Speaker 4: the moment, the government's focus and vision around the Infrastructure 225 00:12:50,040 --> 00:12:53,600 Speaker 4: Priorities Plan and having that twenty year vision, we'd certainly 226 00:12:53,679 --> 00:12:57,760 Speaker 4: hope that that has a nod to fiber deployment and 227 00:12:58,040 --> 00:13:01,120 Speaker 4: repeating the scale and benefits of what we saw out 228 00:13:01,160 --> 00:13:03,840 Speaker 4: of the original fiber program and actually taking that to 229 00:13:03,920 --> 00:13:07,000 Speaker 4: the next seven percent. And that same Deloitte report you 230 00:13:07,080 --> 00:13:11,240 Speaker 4: referred to earlier that recognizes going from eighty seven percent 231 00:13:11,320 --> 00:13:15,000 Speaker 4: to ninety five percent population coverage, that that's the equivalent 232 00:13:15,080 --> 00:13:18,800 Speaker 4: of seventeen billion dollars of economic benefit to bringing fiber 233 00:13:18,920 --> 00:13:22,720 Speaker 4: in high speed broadband connectivity to those regions. Part of 234 00:13:22,760 --> 00:13:26,040 Speaker 4: whom are going to need to find a solution for 235 00:13:26,160 --> 00:13:31,320 Speaker 4: digital equity or inclusion. They tend to be the groups 236 00:13:32,320 --> 00:13:39,080 Speaker 4: like digital seniors, lower income households, or families Mary and PACIFICA, 237 00:13:39,240 --> 00:13:43,079 Speaker 4: or people's with disabilities. They tend to be the groups 238 00:13:43,120 --> 00:13:49,000 Speaker 4: that are disproportionately digitally excluded and yet ironically other groups 239 00:13:49,040 --> 00:13:51,800 Speaker 4: that would benefit the most from actually being involved in 240 00:13:51,800 --> 00:13:54,920 Speaker 4: this digital world. So it's not just expansion, as we say, 241 00:13:54,920 --> 00:13:57,800 Speaker 4: it's that digital equity and ensuring that no one's really 242 00:13:57,880 --> 00:13:59,400 Speaker 4: left behind. 243 00:14:00,840 --> 00:14:03,520 Speaker 2: You've come to the end of a very large period 244 00:14:03,720 --> 00:14:07,920 Speaker 2: of cap x or capital expenditure building the fiber network 245 00:14:07,960 --> 00:14:11,880 Speaker 2: that effectively replaces the old copper network. What actually happens 246 00:14:11,920 --> 00:14:13,079 Speaker 2: to the copper network. 247 00:14:13,400 --> 00:14:16,600 Speaker 4: Our first challenge is actually having a pathway to exit 248 00:14:16,679 --> 00:14:19,040 Speaker 4: from copper and this is something that we've pushed with 249 00:14:19,120 --> 00:14:23,280 Speaker 4: the government and regularly discuss with both government and the 250 00:14:23,320 --> 00:14:28,000 Speaker 4: Commerce Commission. We need a pathway to exit from legacy 251 00:14:28,000 --> 00:14:33,880 Speaker 4: technologies that are no longer fit for purpose. You know, 252 00:14:34,240 --> 00:14:36,880 Speaker 4: there are all better alternatives already available, and if if 253 00:14:36,880 --> 00:14:39,280 Speaker 4: I talk to that for a second, the Comments Commission 254 00:14:39,360 --> 00:14:43,000 Speaker 4: themselves recently published a report looking at the non fiber 255 00:14:43,040 --> 00:14:45,280 Speaker 4: areas of New Zealand, so that thirteen percent of the 256 00:14:45,280 --> 00:14:50,240 Speaker 4: population and ninety seven percent of those premises can already 257 00:14:50,320 --> 00:14:53,640 Speaker 4: receive an alternative to copper technology, so either a mobile 258 00:14:53,720 --> 00:14:58,080 Speaker 4: or an alternative wireless provider. That's before you overlay stalink and 259 00:14:58,120 --> 00:15:03,200 Speaker 4: satellite services, and so there are already alternatives. So we 260 00:15:03,320 --> 00:15:05,200 Speaker 4: need to be able to find a pathway to exit 261 00:15:05,240 --> 00:15:08,240 Speaker 4: from copper. It can't be something that just goes on 262 00:15:08,520 --> 00:15:13,360 Speaker 4: and definitely it's something that is coorus. Ourselves are saying 263 00:15:13,560 --> 00:15:17,440 Speaker 4: that these networks are not for purpose. There are better 264 00:15:17,480 --> 00:15:19,960 Speaker 4: alternatives available, so let's get out of it. And for 265 00:15:20,160 --> 00:15:22,640 Speaker 4: a dollar spent on copper is not the most efficient 266 00:15:23,200 --> 00:15:25,800 Speaker 4: or effective use of that dollar spend. You'd prefer to 267 00:15:25,840 --> 00:15:28,800 Speaker 4: put that into other investment that's going to go to 268 00:15:28,840 --> 00:15:32,440 Speaker 4: better the country. So that's our first challenge is to 269 00:15:32,720 --> 00:15:36,600 Speaker 4: have an exit to copper, and then the second is 270 00:15:36,640 --> 00:15:39,560 Speaker 4: thinking about, well, what's the ability for us to recover 271 00:15:39,760 --> 00:15:44,200 Speaker 4: that copper or extract it. Not all copper is created equal. 272 00:15:44,280 --> 00:15:48,960 Speaker 4: There's large gauge small gauge copper, and it's not as 273 00:15:49,000 --> 00:15:50,960 Speaker 4: simple to actually get it out of the ground either, 274 00:15:51,040 --> 00:15:53,920 Speaker 4: so but there are use cases actually and you see 275 00:15:53,920 --> 00:15:57,040 Speaker 4: that around the world of companies actually moving beyond their 276 00:15:57,080 --> 00:16:00,400 Speaker 4: legacy technology so copper, and actually removing it from the ground. 277 00:16:01,320 --> 00:16:04,480 Speaker 1: We'll lease talk a bit more about the regulation. 278 00:16:04,720 --> 00:16:08,760 Speaker 2: Obviously a big part of coorus being regulated by the 279 00:16:08,760 --> 00:16:12,440 Speaker 2: commis Commission and them setting what you can earn. 280 00:16:12,880 --> 00:16:13,560 Speaker 1: Can you just talk a. 281 00:16:13,560 --> 00:16:17,280 Speaker 2: Bit more about how the regulator currently does that and 282 00:16:17,360 --> 00:16:19,960 Speaker 2: some of the terminology that we hear such as. 283 00:16:19,920 --> 00:16:25,000 Speaker 4: MAR, the MAR, the RAB. The talco industry is renowned 284 00:16:25,320 --> 00:16:31,000 Speaker 4: for scronyms absolutely, so the RAB is our regulated asset 285 00:16:31,040 --> 00:16:35,320 Speaker 4: base and which is essentially the capital that's been spent 286 00:16:35,360 --> 00:16:37,600 Speaker 4: on the network and course today to spent around five 287 00:16:37,640 --> 00:16:41,600 Speaker 4: and a half billion dollars on building this amazing network. 288 00:16:42,640 --> 00:16:46,960 Speaker 4: So that's essentially the foundation of our RAB. Now there's 289 00:16:46,960 --> 00:16:51,800 Speaker 4: a very complicated formula that then the Commerce Commission will 290 00:16:51,840 --> 00:16:56,080 Speaker 4: work out what the MAR is the maximum allowable revenue. 291 00:16:56,240 --> 00:17:00,880 Speaker 4: But essentially the regime, the regulated regime set up in 292 00:17:01,000 --> 00:17:05,040 Speaker 4: order to provide a greater degree of certainty and that 293 00:17:05,160 --> 00:17:09,399 Speaker 4: Chorus can earn a regulated return on that capital investment. 294 00:17:10,440 --> 00:17:13,879 Speaker 4: But that complicated formula will take into our whole into 295 00:17:14,040 --> 00:17:17,119 Speaker 4: account a whole bunch of drivers such as you know 296 00:17:17,160 --> 00:17:21,600 Speaker 4: your capital spend, your depete depreciation profile, your whack, your 297 00:17:21,640 --> 00:17:27,600 Speaker 4: asset beader, your leverage, your tax building blocks. So and 298 00:17:27,680 --> 00:17:30,359 Speaker 4: what it will do at the end is essentially split 299 00:17:30,359 --> 00:17:34,080 Speaker 4: out a number that would say, based on your regulated asset, 300 00:17:34,119 --> 00:17:37,399 Speaker 4: based on what you've spent. This is in theory the 301 00:17:37,440 --> 00:17:41,760 Speaker 4: maximum allowable revenue that Chorus could return could earn over 302 00:17:41,800 --> 00:17:45,080 Speaker 4: a period, and that's probably where there's a secondary complication 303 00:17:45,240 --> 00:17:51,119 Speaker 4: to it because Chorus is subject to defined regulatory periods. 304 00:17:51,200 --> 00:17:56,880 Speaker 4: So our first period PQP one was only three years long, 305 00:17:57,119 --> 00:18:00,679 Speaker 4: ran from its finishing at twenty twenty f twenty two 306 00:18:00,720 --> 00:18:04,720 Speaker 4: to twenty five end of twenty twenty four, so that 307 00:18:04,800 --> 00:18:07,720 Speaker 4: sets it for a three year period. And actually Coorus 308 00:18:07,800 --> 00:18:10,760 Speaker 4: now for the last year and a half or so 309 00:18:10,800 --> 00:18:13,280 Speaker 4: has been in this process of doing a submission for 310 00:18:13,320 --> 00:18:18,560 Speaker 4: our second regulatory period PQP two. We've had earlier this year. 311 00:18:18,960 --> 00:18:22,879 Speaker 4: Our allowances have been determined by the Commerce Commission, so 312 00:18:22,960 --> 00:18:26,160 Speaker 4: that sets an envelope for our operating costs and our 313 00:18:26,160 --> 00:18:30,520 Speaker 4: capital costs, and then we have our MAR determination which 314 00:18:30,560 --> 00:18:33,639 Speaker 4: is due to come hopefully in early December, and that 315 00:18:33,720 --> 00:18:37,360 Speaker 4: will again set the framework out for that MAR across 316 00:18:37,359 --> 00:18:39,200 Speaker 4: what will be a four year period, so this will 317 00:18:39,280 --> 00:18:41,439 Speaker 4: run to from twenty twenty five through to the end 318 00:18:41,440 --> 00:18:43,359 Speaker 4: of twenty twenty eight. 319 00:18:44,880 --> 00:18:49,840 Speaker 2: You've called for deregulation in the sector this year, and 320 00:18:49,880 --> 00:18:51,560 Speaker 2: when I think about it, you know, when we look 321 00:18:51,560 --> 00:18:53,800 Speaker 2: at the lakes of Spark and two degrees in One 322 00:18:53,840 --> 00:18:56,679 Speaker 2: New Zealand, they all run their own mobile networks. So 323 00:18:56,720 --> 00:19:00,000 Speaker 2: as you pointed out earlier, you are definitely subject to competition, 324 00:19:00,280 --> 00:19:02,720 Speaker 2: at least at the margin. And if you're a household 325 00:19:02,760 --> 00:19:05,440 Speaker 2: where you're not streaming lots and lots or downloading lots 326 00:19:05,440 --> 00:19:08,960 Speaker 2: and lots then probably using the mobile network as as 327 00:19:09,000 --> 00:19:12,280 Speaker 2: a viable option. Then you've also got starlink and the 328 00:19:12,320 --> 00:19:16,000 Speaker 2: lacks of those other players coming in as well, which 329 00:19:16,040 --> 00:19:19,439 Speaker 2: is a bit different to I guess other industries or 330 00:19:19,520 --> 00:19:22,760 Speaker 2: other companies that are heavily regulated, like an airport or 331 00:19:23,320 --> 00:19:25,320 Speaker 2: a Talco line. 332 00:19:25,840 --> 00:19:26,639 Speaker 1: You know that you are. 333 00:19:26,520 --> 00:19:30,040 Speaker 2: Facing competition and yet still the Commics Commission determines what 334 00:19:30,080 --> 00:19:33,880 Speaker 2: you can earn. If the industry was to regulated, how 335 00:19:33,920 --> 00:19:36,439 Speaker 2: would consumers ultimately benefit from that, do you. 336 00:19:36,440 --> 00:19:40,040 Speaker 4: Think, well, I mean, i'd point to the Commission earlier 337 00:19:40,080 --> 00:19:45,280 Speaker 4: this year having done a review for of fiber deregulation 338 00:19:45,600 --> 00:19:49,280 Speaker 4: or five year regulation as it is, and not seeing 339 00:19:49,880 --> 00:19:53,200 Speaker 4: enough of a change where you'd say, actually, they're going 340 00:19:53,200 --> 00:19:57,760 Speaker 4: to step into an investigation. So you know, when I 341 00:19:57,800 --> 00:20:02,480 Speaker 4: call out regulation and deregulation from a fiber perspective, I 342 00:20:02,480 --> 00:20:06,840 Speaker 4: think Chorus is subject to a lot more stringent regulation 343 00:20:06,960 --> 00:20:09,199 Speaker 4: even compared to the other local fiber companies. You know, 344 00:20:09,240 --> 00:20:13,119 Speaker 4: there are three others through the country. Chorus has a 345 00:20:13,119 --> 00:20:18,560 Speaker 4: majority of the fiber infrastructure, but we're already doing a 346 00:20:18,560 --> 00:20:21,120 Speaker 4: lot more than they are having to provide under our 347 00:20:21,119 --> 00:20:24,480 Speaker 4: regulatory regime. And then your rights c enter you call 348 00:20:24,480 --> 00:20:28,000 Speaker 4: out from a mobile perspective, it's essentially not there that 349 00:20:28,160 --> 00:20:32,359 Speaker 4: we don't have the same constraints or regulatory requirements in 350 00:20:33,080 --> 00:20:37,240 Speaker 4: a wireless world. So it is quite different, and it's 351 00:20:37,240 --> 00:20:41,359 Speaker 4: something that we'd like to see given competition that starts 352 00:20:41,400 --> 00:20:44,639 Speaker 4: to actually even out. At the same time, there's a 353 00:20:44,640 --> 00:20:48,000 Speaker 4: certain degree with fiber regulation that it does provide greater 354 00:20:48,359 --> 00:20:51,159 Speaker 4: certainty about that framework, so that you know, we've just 355 00:20:51,200 --> 00:20:54,600 Speaker 4: talked to a regulated framework as well. So I mean 356 00:20:54,640 --> 00:20:59,359 Speaker 4: from a consumer perspective, it would be a fundamental change 357 00:21:00,000 --> 00:21:03,719 Speaker 4: because at the moment, Chorus can't retail, so we have 358 00:21:05,280 --> 00:21:08,200 Speaker 4: our entire frameworks based off being a wholesaler and working 359 00:21:08,280 --> 00:21:12,439 Speaker 4: with the retail service providers. So changes to deregulation and 360 00:21:12,480 --> 00:21:15,280 Speaker 4: fiber we'd probably push in the first instance that we're 361 00:21:15,320 --> 00:21:19,119 Speaker 4: at least only subject to the same regulations that the 362 00:21:19,160 --> 00:21:24,560 Speaker 4: local fiber companies are. Beyond that, there's regulatory obligations that 363 00:21:24,600 --> 00:21:30,000 Speaker 4: we have around service availability and performance. And the fiber network, 364 00:21:30,000 --> 00:21:34,320 Speaker 4: by the way, is the only broadband technology that is 365 00:21:34,560 --> 00:21:38,160 Speaker 4: regulated to have more supply than there is demand, which 366 00:21:38,200 --> 00:21:42,400 Speaker 4: is why there's almost this loop of capital investment required 367 00:21:42,440 --> 00:21:47,080 Speaker 4: because our usage just continues to grow. But Corus is 368 00:21:47,080 --> 00:21:50,320 Speaker 4: the only one that has that. You think about that 369 00:21:50,359 --> 00:21:54,080 Speaker 4: from a customer experience perspective about you, But my kids 370 00:21:54,119 --> 00:21:56,680 Speaker 4: at home pretty quick to tell me when they think 371 00:21:57,080 --> 00:21:59,520 Speaker 4: the Wi Fi is not working and the broadband's not working, 372 00:21:59,720 --> 00:22:01,960 Speaker 4: which they can't understand why when their dad does what 373 00:22:02,040 --> 00:22:05,960 Speaker 4: he does. So anyway, that's a that's a different story. 374 00:22:05,960 --> 00:22:08,600 Speaker 4: But yeah, that you don't have that same kind of 375 00:22:08,760 --> 00:22:11,879 Speaker 4: condition conditionality in a wireless world. 376 00:22:13,560 --> 00:22:16,679 Speaker 2: Yeah, I was thinking a bit about you know, with boardband, 377 00:22:16,800 --> 00:22:20,080 Speaker 2: we do we continually expect more for less every year. 378 00:22:20,200 --> 00:22:24,399 Speaker 2: We expect faster times and more without actually paying a 379 00:22:24,520 --> 00:22:28,040 Speaker 2: higher monthly bill. So with that in mind, how do 380 00:22:28,080 --> 00:22:31,479 Speaker 2: you think about growth going forward? Outside of population growth, 381 00:22:31,840 --> 00:22:33,600 Speaker 2: what are some of the other drivers that can help 382 00:22:33,720 --> 00:22:35,040 Speaker 2: sort of grow grow the industry? 383 00:22:35,480 --> 00:22:37,479 Speaker 4: Yeah, I mean, let me pick up first on the 384 00:22:37,560 --> 00:22:40,040 Speaker 4: on the data point, because I always I find this 385 00:22:40,160 --> 00:22:42,720 Speaker 4: quite fascinating, and it goes back to your opening question. 386 00:22:42,960 --> 00:22:45,440 Speaker 4: You know why this industry because I love how dynamic 387 00:22:45,480 --> 00:22:50,520 Speaker 4: it is and having access to high speed fiber connectivity 388 00:22:50,960 --> 00:22:55,520 Speaker 4: has fundamentally changed the way that we all live, learn, 389 00:22:56,359 --> 00:22:59,320 Speaker 4: work and play. And we saw that even more so 390 00:23:00,040 --> 00:23:05,359 Speaker 4: during the pandemic for COVID and being at home heavily 391 00:23:05,400 --> 00:23:09,560 Speaker 4: restricted but still actually being able to work and live 392 00:23:10,160 --> 00:23:13,520 Speaker 4: and order takeaways and get them dropped at your door. 393 00:23:13,560 --> 00:23:16,800 Speaker 4: But it's fundamentally changed the way that we live. So, 394 00:23:17,520 --> 00:23:19,960 Speaker 4: you know, even though it might seem like we're providing 395 00:23:20,000 --> 00:23:23,080 Speaker 4: the same sort of service as we were back when 396 00:23:23,160 --> 00:23:27,440 Speaker 4: Chorus first started with the UFB initiative, it's fundamentally changed. 397 00:23:28,240 --> 00:23:32,240 Speaker 4: To give you another statistic, ten years ago, even the 398 00:23:32,320 --> 00:23:35,440 Speaker 4: average data usage in New Zealand per month was forty 399 00:23:35,480 --> 00:23:43,800 Speaker 4: gigabits gigabytes. Sorry, it's now over six hundred gigabytes. We 400 00:23:43,840 --> 00:23:48,399 Speaker 4: now do the annual usage from ten years ago in 401 00:23:48,520 --> 00:23:54,159 Speaker 4: just over two weeks. And again I'd say that's a 402 00:23:54,200 --> 00:23:56,760 Speaker 4: pump for the fiber network because that shows again how 403 00:23:56,840 --> 00:24:02,800 Speaker 4: scalable it actually is, and it's built for that future. Again, 404 00:24:02,960 --> 00:24:07,840 Speaker 4: so you know, it's it's something that when you look 405 00:24:07,880 --> 00:24:11,480 Speaker 4: at the use cases of where that that might grow. Yes, 406 00:24:11,560 --> 00:24:15,399 Speaker 4: the rate of growth might change and lost late, but 407 00:24:15,440 --> 00:24:18,560 Speaker 4: I don't think it's ever coming down. So and you 408 00:24:18,600 --> 00:24:20,760 Speaker 4: think about where some of that growth might be, because 409 00:24:20,760 --> 00:24:25,440 Speaker 4: that speaks to the industry, you know, as terrestrial TV 410 00:24:25,880 --> 00:24:31,400 Speaker 4: increasingly and most likely comes to an IP solution as 411 00:24:31,400 --> 00:24:34,359 Speaker 4: we get to four K mass market. And and what 412 00:24:34,400 --> 00:24:36,920 Speaker 4: I mean by that is, you know, even though four 413 00:24:37,000 --> 00:24:39,480 Speaker 4: K has been around for a while, not every household 414 00:24:39,480 --> 00:24:43,280 Speaker 4: has four K devices, and not every household is actually 415 00:24:43,440 --> 00:24:47,760 Speaker 4: consuming four K content. Right at the moment, we have 416 00:24:48,040 --> 00:24:50,240 Speaker 4: I think, on average about I think the average is 417 00:24:50,240 --> 00:24:54,600 Speaker 4: now twenty six devices connected in our home, which seems crazy, right, 418 00:24:54,600 --> 00:24:56,360 Speaker 4: but if you actually add them up and you think 419 00:24:56,400 --> 00:25:01,560 Speaker 4: about the laptops the iPads, the wearables and watches, the TV, 420 00:25:02,000 --> 00:25:06,360 Speaker 4: the smart fridge, disordering your milk for next week, the security, 421 00:25:07,200 --> 00:25:09,640 Speaker 4: all your other appliance. It's really not hard to get 422 00:25:09,680 --> 00:25:13,760 Speaker 4: to twenty six and that's only forecasts to grow even 423 00:25:13,760 --> 00:25:17,520 Speaker 4: over the next five years to up to over forty devices. 424 00:25:17,560 --> 00:25:21,280 Speaker 4: So there is growth and scalability in the fiber network 425 00:25:21,800 --> 00:25:26,639 Speaker 4: itself in terms of where the growth for Chorus comes from. 426 00:25:26,920 --> 00:25:30,440 Speaker 4: One of the things Chorus is doing now is we're 427 00:25:30,440 --> 00:25:34,679 Speaker 4: in this transition from what I've termed as Corus is 428 00:25:34,720 --> 00:25:38,560 Speaker 4: the great network builder to now transitioning to being Coorus 429 00:25:38,680 --> 00:25:43,360 Speaker 4: is the great network operator, and the fundamentally different capabilities 430 00:25:43,359 --> 00:25:48,040 Speaker 4: and mindsets. But largely the UFB program has completed a 431 00:25:48,200 --> 00:25:52,800 Speaker 4: right where past the peak of installs, competition and technology 432 00:25:52,880 --> 00:25:57,760 Speaker 4: is advancing. The government, regulatory and economic frameworks are evolving, 433 00:25:57,800 --> 00:26:01,720 Speaker 4: as are the expectations of cooruses, yearholders and other stakeholders. 434 00:26:01,760 --> 00:26:05,480 Speaker 4: So we need to move as well. Now. Part of 435 00:26:05,480 --> 00:26:09,960 Speaker 4: that shift to becoming a great network operator is restructuring 436 00:26:09,960 --> 00:26:12,480 Speaker 4: our teams in the way that we work to more 437 00:26:12,520 --> 00:26:15,080 Speaker 4: of a matrix model, so thinking more of our three 438 00:26:15,160 --> 00:26:18,360 Speaker 4: we have three value streams now, which the principally access, 439 00:26:18,600 --> 00:26:20,760 Speaker 4: So how do we keep growing into our base. We're 440 00:26:20,800 --> 00:26:23,480 Speaker 4: currently at seventy two percent uptake on all of the 441 00:26:23,520 --> 00:26:26,160 Speaker 4: premises that we've passed with fiber. We want to grow 442 00:26:26,200 --> 00:26:29,440 Speaker 4: that to eighty percent, and we see the pathways to 443 00:26:29,920 --> 00:26:34,359 Speaker 4: actually achieving that. In infrastructure, it's our second value stream. 444 00:26:34,680 --> 00:26:37,919 Speaker 4: This is a new stream, so it was largely passive previously. 445 00:26:38,040 --> 00:26:43,320 Speaker 4: So but thinking more backholl wireless, co location revenues, other 446 00:26:43,400 --> 00:26:48,240 Speaker 4: infrastructure style revenues that have now got dedicated resources, prioritization 447 00:26:48,440 --> 00:26:53,639 Speaker 4: and investment to actually drive growth and really leverage the 448 00:26:53,640 --> 00:26:56,800 Speaker 4: core assets that Chorus has because they are amazing and 449 00:26:57,400 --> 00:27:00,240 Speaker 4: you probably won't appreciate this, but Chorus is actually of 450 00:27:00,280 --> 00:27:05,960 Speaker 4: New Zealand's largest property owners. We have over six hundred 451 00:27:06,000 --> 00:27:10,520 Speaker 4: exchanges throughout the country, thousands of those cabinets that we're 452 00:27:10,800 --> 00:27:14,440 Speaker 4: now busily putting all this beautiful artwork on with local artists. 453 00:27:15,440 --> 00:27:17,879 Speaker 4: We have over two hundred thousand light poles or poles 454 00:27:17,880 --> 00:27:21,159 Speaker 4: that have half of which have fiber and power running 455 00:27:21,160 --> 00:27:23,800 Speaker 4: to them, an awful lot of copper in the ground, 456 00:27:24,720 --> 00:27:27,520 Speaker 4: and about twelve hundred odd high sites. All of these 457 00:27:27,560 --> 00:27:31,600 Speaker 4: things are property that reimagined in a different way, actually 458 00:27:32,000 --> 00:27:34,919 Speaker 4: create an opportunity for Chorus to think about these assets 459 00:27:34,960 --> 00:27:37,440 Speaker 4: in a different way, leverage them more effectively with our 460 00:27:37,440 --> 00:27:39,920 Speaker 4: core to what we do, or divest from them as 461 00:27:39,920 --> 00:27:43,320 Speaker 4: fast as we can. And then that third value stream 462 00:27:43,720 --> 00:27:48,639 Speaker 4: is what we call frontier, and that's essentially about accelerating 463 00:27:48,640 --> 00:27:50,800 Speaker 4: our exit from copper and we want to do that 464 00:27:50,840 --> 00:27:53,760 Speaker 4: by twenty thirty. We need to put a date on 465 00:27:53,800 --> 00:27:55,800 Speaker 4: that and work backwards on what it is we need 466 00:27:55,840 --> 00:27:58,320 Speaker 4: to believe. And then equally, as we've talked a bit 467 00:27:58,359 --> 00:28:03,080 Speaker 4: about expansion and how do we step in that into 468 00:28:03,119 --> 00:28:06,119 Speaker 4: that in a way that has broader industry engagement. And 469 00:28:06,160 --> 00:28:09,200 Speaker 4: again looking back to a public and private partnership government. 470 00:28:11,800 --> 00:28:16,520 Speaker 2: You recently announced a dividend policy that dividends would grow 471 00:28:16,560 --> 00:28:19,800 Speaker 2: with inflation. What are the leavers that you need to 472 00:28:19,960 --> 00:28:22,040 Speaker 2: control in order to be able to achieve that. 473 00:28:23,000 --> 00:28:27,440 Speaker 4: Yeah, So earlier this year we did a reassessment in 474 00:28:27,520 --> 00:28:31,840 Speaker 4: a reset of our capital management policy, and yes, the 475 00:28:31,880 --> 00:28:35,840 Speaker 4: core pillar of that was around having a growing sustainable 476 00:28:35,840 --> 00:28:41,360 Speaker 4: dividend at least at the rate of inflation. Now we 477 00:28:41,400 --> 00:28:43,800 Speaker 4: see that's achievable through the changes that we're making, a 478 00:28:43,880 --> 00:28:47,520 Speaker 4: lot of which I've just spoken to those stepping into 479 00:28:47,520 --> 00:28:52,280 Speaker 4: where those growth areas actually are. So eighty percent uptake, 480 00:28:52,520 --> 00:28:56,960 Speaker 4: becoming an all fiber business focusing on property optimization and 481 00:28:57,000 --> 00:29:01,280 Speaker 4: other efficiency. There's opportunities for us to grow into that, 482 00:29:01,400 --> 00:29:06,280 Speaker 4: and that's where that dividend growth we see coming from. 483 00:29:06,320 --> 00:29:12,240 Speaker 4: But we certainly see choruses an essential digital infrastructure provider, 484 00:29:12,360 --> 00:29:14,520 Speaker 4: and we can talk about the credicality of it and 485 00:29:14,560 --> 00:29:19,760 Speaker 4: how we all use our fiber connections today, But that 486 00:29:19,880 --> 00:29:23,600 Speaker 4: dividend policy and a capital management framework was essentially about 487 00:29:23,680 --> 00:29:27,720 Speaker 4: us having greater confidence in our cash flows, greater certainty, 488 00:29:27,760 --> 00:29:31,760 Speaker 4: and our regulatory environments said, we're transitioning now to be 489 00:29:31,800 --> 00:29:34,200 Speaker 4: that great network operator. So we passed the peak of 490 00:29:34,240 --> 00:29:39,240 Speaker 4: installs subject to something else happening that would enable further expansion, 491 00:29:39,960 --> 00:29:42,480 Speaker 4: So we have that greater degree of confidence when we 492 00:29:42,520 --> 00:29:43,520 Speaker 4: look out to the future. 493 00:29:44,520 --> 00:29:48,920 Speaker 2: Now, we can't talk about technology without mentioning AI. You know, 494 00:29:48,960 --> 00:29:52,840 Speaker 2: you talked about the demand curve, and you know demand's 495 00:29:52,880 --> 00:29:55,920 Speaker 2: only going to increase, maybe the rate will slow down, 496 00:29:56,120 --> 00:29:59,600 Speaker 2: but definitely expecting that demand will continue to go up. 497 00:30:00,480 --> 00:30:03,120 Speaker 2: What if any impact do you see sort of this 498 00:30:03,280 --> 00:30:06,840 Speaker 2: AI wave that's happening play on that demand curve. 499 00:30:07,320 --> 00:30:10,520 Speaker 4: I think it's the next wave that's going to fundamentally 500 00:30:10,600 --> 00:30:13,360 Speaker 4: change the way we live, which is a little scary 501 00:30:13,400 --> 00:30:15,160 Speaker 4: when you I mean you could spend the entire day 502 00:30:15,320 --> 00:30:19,560 Speaker 4: literally just reading AI articles and I think I've got 503 00:30:19,600 --> 00:30:21,080 Speaker 4: to be careful to because AI has been around for 504 00:30:21,120 --> 00:30:22,960 Speaker 4: a long time, and even from a chorus perspective and 505 00:30:23,000 --> 00:30:25,080 Speaker 4: running the network, there's a lot of AI in a 506 00:30:25,120 --> 00:30:28,200 Speaker 4: network that actually is from an optimization and efficiency perspective 507 00:30:28,240 --> 00:30:31,080 Speaker 4: and making sure the experience that you have a home 508 00:30:31,120 --> 00:30:36,640 Speaker 4: with your fiber connection is amazing. It's generative AI that 509 00:30:36,720 --> 00:30:40,080 Speaker 4: I think has the market all crazy and thinking about 510 00:30:40,160 --> 00:30:44,400 Speaker 4: the applications for that and llms, you know, with the 511 00:30:44,480 --> 00:30:50,200 Speaker 4: large language models and New Zealand I think represents a 512 00:30:50,520 --> 00:30:53,760 Speaker 4: potential opportunity, particularly for data centers and data connectivity from 513 00:30:53,760 --> 00:30:57,400 Speaker 4: a global perspective as well. I think we've got the 514 00:30:57,440 --> 00:31:00,200 Speaker 4: last steps. We have over fifty data centers through out 515 00:31:00,680 --> 00:31:03,000 Speaker 4: New Zealand as well, and there's been a couple of 516 00:31:03,040 --> 00:31:06,320 Speaker 4: examples that have announced AI training centers and trying to 517 00:31:06,440 --> 00:31:09,920 Speaker 4: establish those in New Zealand because of part cost of 518 00:31:10,000 --> 00:31:14,840 Speaker 4: land and access and equally just thinking about the connectivity 519 00:31:14,840 --> 00:31:18,440 Speaker 4: and connecting back up to the world. But in general, 520 00:31:18,480 --> 00:31:22,520 Speaker 4: I think it's a watch and see. You know, I 521 00:31:22,520 --> 00:31:25,640 Speaker 4: think the pace of change that we're seeing it's a 522 00:31:25,640 --> 00:31:28,520 Speaker 4: little scary, but I think it will be that next 523 00:31:28,560 --> 00:31:30,960 Speaker 4: wave that fundamentally changes the way we live. 524 00:31:32,720 --> 00:31:36,320 Speaker 2: And in terms of just going back to earnings and 525 00:31:36,680 --> 00:31:40,280 Speaker 2: the regulation by the Comments Commission, are there any parts 526 00:31:40,320 --> 00:31:42,280 Speaker 2: of your revenue that are not regulated? 527 00:31:42,480 --> 00:31:44,240 Speaker 4: Yeah, but twenty percent at the moment. So when I 528 00:31:44,240 --> 00:31:47,480 Speaker 4: talk to that infrastructure stream, so back hall, co location, 529 00:31:48,120 --> 00:31:53,160 Speaker 4: other infrast infrastructure style products. So I think Chorus roughly 530 00:31:53,200 --> 00:31:56,680 Speaker 4: as a billion dollars of turnover, about two hundred million 531 00:31:56,680 --> 00:32:01,360 Speaker 4: of that's actually in non regulated revenue to the non 532 00:32:01,400 --> 00:32:04,000 Speaker 4: fiber So obviously that's copper as well at the moment, 533 00:32:04,040 --> 00:32:06,760 Speaker 4: but that is increasingly on the decline. 534 00:32:07,600 --> 00:32:10,600 Speaker 1: And do you see that twenty percent number increasing then 535 00:32:10,680 --> 00:32:12,520 Speaker 1: over time it has to. 536 00:32:13,120 --> 00:32:16,719 Speaker 4: Honestly, there's a part of establishing that value stream for 537 00:32:16,840 --> 00:32:21,480 Speaker 4: infrastructure was around leveraging our core assets more effectively being 538 00:32:21,480 --> 00:32:24,960 Speaker 4: one of New Zealand's largest property owners, recognizing those fifty 539 00:32:25,000 --> 00:32:28,880 Speaker 4: odd data centers, even the connectivity that we get between 540 00:32:29,560 --> 00:32:31,640 Speaker 4: those data centers and back out over the world, and 541 00:32:31,680 --> 00:32:35,320 Speaker 4: what's the role that chorus actually plays in that even 542 00:32:35,360 --> 00:32:40,360 Speaker 4: from a competition slash partner perspective with five G five 543 00:32:40,440 --> 00:32:43,160 Speaker 4: G when it's truly working as standalone five G which 544 00:32:43,200 --> 00:32:45,800 Speaker 4: is a different standard of it which we don't have 545 00:32:45,840 --> 00:32:50,360 Speaker 4: in New Zealand yet, but when one of the mobile 546 00:32:50,400 --> 00:32:54,440 Speaker 4: operators actually gets to that standlone, that's true five G 547 00:32:55,280 --> 00:33:00,000 Speaker 4: running at network edge and network's liceing for dedicated enterprise networks, 548 00:33:00,040 --> 00:33:03,400 Speaker 4: but the same token, you'd still need the back hall 549 00:33:03,600 --> 00:33:05,920 Speaker 4: for the fiber network to actually make it be as 550 00:33:05,920 --> 00:33:07,440 Speaker 4: amazing as it could be. 551 00:33:08,240 --> 00:33:09,280 Speaker 1: It's where you come in. 552 00:33:09,600 --> 00:33:14,080 Speaker 2: Absolutely well, I think we're almost at time, but before 553 00:33:14,120 --> 00:33:16,400 Speaker 2: we wrap up, I'd love to ask one more question. 554 00:33:17,520 --> 00:33:19,320 Speaker 1: We are living in a very connected world. 555 00:33:19,400 --> 00:33:22,640 Speaker 2: Obviously, connectivity is really really important for all sorts of benefits, 556 00:33:22,800 --> 00:33:26,760 Speaker 2: some of which we spoke about today, but also disconnecting 557 00:33:26,800 --> 00:33:27,840 Speaker 2: is really important as well. 558 00:33:28,040 --> 00:33:29,760 Speaker 1: So how do you like to disconnect? 559 00:33:30,880 --> 00:33:36,840 Speaker 4: A great question. You know, I'm really big on family, 560 00:33:36,960 --> 00:33:40,600 Speaker 4: so I'm spending time with my wife Kate and our 561 00:33:40,640 --> 00:33:44,120 Speaker 4: five children is really important. And you know, we started 562 00:33:44,440 --> 00:33:47,160 Speaker 4: our session talking about the last couple of decades that 563 00:33:47,200 --> 00:33:51,160 Speaker 4: I've been involved in the telco industry and actually I've 564 00:33:51,160 --> 00:33:54,160 Speaker 4: been doing this for probably almost those twenty odd years. 565 00:33:54,200 --> 00:33:58,120 Speaker 4: But when I'm on leave, I disconnect as much as 566 00:33:58,200 --> 00:34:02,600 Speaker 4: I can. I love being out in nature. We have 567 00:34:02,680 --> 00:34:06,520 Speaker 4: so many amazing, great walks around New Zealand and it's 568 00:34:06,560 --> 00:34:09,320 Speaker 4: amazing to just be out and disconnect and be a 569 00:34:09,320 --> 00:34:12,040 Speaker 4: lot more mindful about who you're worth where you are. 570 00:34:12,520 --> 00:34:15,720 Speaker 4: We have such a beautiful country, and I've been fortunate 571 00:34:15,760 --> 00:34:18,160 Speaker 4: to live in a number of others, but you know, 572 00:34:18,239 --> 00:34:21,360 Speaker 4: home is home and we should treasure that. And I 573 00:34:21,920 --> 00:34:24,080 Speaker 4: as much as I'm in the telco industry and have 574 00:34:24,160 --> 00:34:28,000 Speaker 4: been for a long time, I love disconnecting away from 575 00:34:28,000 --> 00:34:28,479 Speaker 4: it as well. 576 00:34:29,120 --> 00:34:29,800 Speaker 1: I agree. 577 00:34:30,320 --> 00:34:32,840 Speaker 2: Well, thanks so much Mark for being on the show. 578 00:34:32,920 --> 00:34:35,759 Speaker 2: We learned so much today and I really appreciate your time. 579 00:34:35,840 --> 00:34:37,640 Speaker 4: Thank you, You're welcome, Thanks for having. 580 00:34:37,400 --> 00:34:38,759 Speaker 1: Me, Thanks for tuning in. 581 00:34:39,320 --> 00:34:41,440 Speaker 2: You can watch Shared Lunch on YouTube, or you can 582 00:34:41,480 --> 00:34:43,440 Speaker 2: follow us on your favorite podcast app. 583 00:34:43,880 --> 00:34:44,600 Speaker 1: Have a great week.