Chorus puts a positive spin on connection losses

Chorus CEO Kate McKenzie has sought to put a positive spin on a first half result that showed net earning down 29 percent, describing the loss of “just 5,000 broadband connections over six months” as “a positive outcome.”

NPAT was $47m compared to $66m in H1 of FY17. EBITDA was $329m, down from $335m in H1FY17 and operating revenue $449m, down from %529m. However when adjusted for new accounting standards, H1 FY17 EBITA would have been $361m. The adoption of three new accounting standards affected results for the current period with changes in the treatment of operating leases and capitalisation of some costs expensed in HY17.

McKenzie said the impact on revenue of lines lost in previous periods was apparent in the financial results this period, but “It was pleasing that the line loss trend showed signs of abating during the half.”

Chorus’s total connections fell by 43,000 to 1.559 million, 37,000 of which were copper lines with no broadband service. Its total broadband connections fell by 5000 to 1.181 million.

She said improving the customer experience would be key to minimising future line losses. “For example, we are aiming to consistently deliver one day installs for fibre by the end of next financial year.

“In that context, I was pleased to see average lead times for fibre reduce from 22 days to 14 days during the half year, despite record order volumes.”

Chorus said it was implementing a range of initiatives identified through a strategic review undertaken in the second half of the previous financial year.

The review, it said, had “considered the longer term outlook and opportunities for the business, canvassed Chorus’ response to increased network competition, the need for careful management of costs, the potential regulatory requirements under a utility style framework and the need to continue improving the end-to-end experience for customers.”

Ten percent of jobs to go

McKenzie said one of the major initiatives flowing from the strategic review had been a new operating model for the company that would see staff numbers fall by 10 percent.

“Wider retailer adoption of automated fibre provisioning, together with other process improvements, has allowed us to review our internal structure with an expected 10 percent reduction in headcount now well progressed.”

She added: “We anticipate further benefits to labour costs and other cost lines in the second half as we continue to focus on ensuring our cost base is sustainable. We also anticipate that improvements will have a commensurate positive impact on the customer experience.”

Just 18 months ago Chorus said it was looking to hire 250 technicians and support staff by the end of 2016 “to meet the demands of running an existing copper network, building a new fibre network and installing thousands of new fibre connections every month.”

Copyright © 2018 IDG Communications, Inc.

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