The government and ASIC are demanding banks and financial service providers strengthen their scam and fraud defences. With this nefarious activity costing Australians $318 million in the past 15 months alone, the industry’s positive response has not come quickly enough.
With industry funds feeling the heat from APRA, it’s likely more members will look for a better option, especially if they are nearing or in retirement. Those choosing to do so need to tread warily.
Chorus on track to finalise fibre network roll-out
New Zealand’s fixed-line communications infrastructure business, Chorus (ASX:CNU), is at an pivotal point in its history as it evolves from the “great network builder” to the “great network provider”.
In this new environment, the focus will switch to driving fibre uptake, growing new revenues by leveraging its core network assets more effectively and retiring its legacy copper network as fast as possible, says chief executive officer Mark Aue (pictured).
Just how well Aue and his team are implementing this transformation will become more evident when the half-year results to December 31, 2024, are announced later this month.
In the interim shareholders can draw comfort from the full-year results to June 30, 2024, when Chorus – its share price rose a modest 4.5 per cent in the past year to close at $AU7.81 on Tuesday – increased revenue to $NZ1.01 billion ($AU913 million), up four per cent from $NZ980 million ($AU886 million) in the previous corresponding year. This growth was driven by an increase in fibre broadband connections that now account for 87 per cent of total fixed-line connections.
The company’s EBITDA stood at $NZ700 million ($AU633 million), also up four per cent from the previous corresponding year, reflecting strong cost management and continued fibre uptake.
For shareholders, the best news was the payout, with 47.5 NZ cents a share (43 AU cents) dividend in 2024, up 12 per cent compared with 2023. And Chorus is predicting a hefty 21 per cent increase to 57.5 NZ cents a share (52 AU cents) in 2025, reflecting its confidence in its cash-flow stability and commitment to returning value to shareholders.
The bonus is Chorus’ decision to revise its dividend payout range from between 60 and 80 per cent to between 70 and 90 per cent of net operating free cash flows, reinforcing its focus on sustainable returns.
One of the most significant transformations for Chorus is its transition to a fully fibre-based network. At December 31, 2024, the company had 1,098,000 fibre connections, with uptake across its network reaching 71.7 per cent.
The copper network continues to be phased out, with only 123,000 copper lines remaining. Chorus expects to retire its copper network in fibre areas by the end of 2026, significantly reducing operational costs and streamlining its infrastructure.
With fibre technology becoming the global standard, Chorus is well-positioned to capitalise on this shift. The OECD has highlighted the growing dominance of fibre networks worldwide, reinforcing the long-term viability of Chorus’ investment.
“We accelerated our program to retire the copper network and there are fewer than 45,000 copper connections remaining where our fibre is available,” says Aue. “This means we’re well on track to retiring copper in our urban fibre areas by the end of 2026.
“We’ve closed more than 1,250 copper broadband cabinets so far and will soon have our first fibre-only suburban exchanges. We’re already seeing the benefits of this shift with electricity usage fall by another three per cent in 2024 as the legacy network equipment is powered down.”
Regulation remains a key factor influencing Chorus’ strategic direction. The NZ Commerce Commission has set a new weighted average cost of capital (WACC) at 7.68 per cent for the next regulatory period (2025-28), up from 4.72 per cent. This increase will allow Chorus to achieve greater returns on its regulated asset base, which has grown from $NZ5.4 billion ($AU4.86 billion) to $NZ5.9 billion ($AU5.30 billion).
Additionally, the Commission is investigating the deregulation of copper services, a move that could further simplify Chorus’ operational focus. The company has also initiated a capital management review, ensuring that it allocates cash flow efficiently while maintaining a solid balance sheet.
Beyond its core fibre business, Chorus is exploring adjacent growth opportunities. It is expanding fibre coverage to an additional 10,000 homes and businesses in smaller communities, responding to strong consumer demand. The uptake of high-speed plans continues to rise, with 25 per cent of residential connections now on 1Gbps or faster plans.
Multi-gigabit Hyperfibre connections are also gaining traction, growing 19 per cent in October-December 2024 to nearly 5,000 connections. This trend signals an increasing appetite for ultra-fast broadband, positioning Chorus to meet evolving market demands.
For shareholders, Chorus presents a compelling case for long-term value creation. The company’s steady financial performance, strong dividend outlook and strategic shift towards an all-fibre future make it a resilient investment.
With regulatory clarity improving, leadership strengthening, and growth opportunities expanding, Chorus is well-positioned for sustained success in the evolving telecommunications landscape.
