Spark New Zealand : delivers to guidance despite ongoing Covid-19 disruption, in first year of new strategy

Spark New Zealand (Spark) today announced it will invest an additional $35 million to accelerate its 5G rollout, boosting total mobile connectivity investment to $125 million in FY22, and delivering 5G coverage to approximately 90% of the population by the end of calendar year 2023 - assuming the necessary spectrum is made available by the New Zealand Government.

The accelerated rollout will introduce 5G to an additional 10-15 locations across the motu by the end of 2022, with more to follow in 2023. This includes expanding coverage in the existing Spark 5G locations of Auckland, Christchurch, Hamilton, Dunedin, New Plymouth, and Palmerston North.

The accelerated rollout will see Spark upgrade approximately 50% of its sites nationally to 5G by the end of calendar year 2022, and 85% by the end of calendar year 2023.

Spark CEO Jolie Hodson said: 'We have seen a seismic shift from physical to digital as a result of COVID-19, and this is only going to accelerate from here. It is critical for New Zealand to continue to have access to world-class networks that will underpin innovation, productivity improvements, and our transition to a high-tech, low-carbon economy.'

The accelerated 5G rollout will help Spark meet the growing demand for data, which grows by approximately 40% every year, and will be coupled with 4G upgrades at the same time to boost overall mobile connectivity capacity.

'As well as expanding our 5G coverage footprint to a broader range of locations across the country, we will target the rollout in areas where we have high demand for wireless broadband and for our not-for-profit broadband product Skinny Jump, which runs over 4G. By upgrading 4G at the same time as we introduce 5G we will create more capacity for those in need.

'We are also continuing to invest in additional 4G capacity in rural areas that are currently underserved. Our joint venture the Rural Connectivity Group has already delivered over 260 new 4G cell sites and this will increase to more than 400 over the next 18 months.'

As the 5G network expands it will start to intersect with Spark's existing Internet of Things (IoT) network, which already covers 99% of the New Zealand population¹.

'Our IoT networks already support a wide range of use cases in sectors such as, utilities, health, manufacturing, and transport. The evolution of 5G over time will enable mass connectivity and new industrial use cases that will improve productivity and sustainability beyond what is possible today.'

Work done by NERA Economic Consulting predicts that the national rollout of 5G could add between $5.7 billion and $8.9 billion per year to the New Zealand economy over the next 10 years².

Hodson continued: 'Over time, as we start to build stand-alone 5G networks, we will open up innovation opportunities through 5G mobile edge compute³ and network slicing, and we will be working with the business community in the coming year to identify and test new use cases.'

In May last year Spark was allocated management rights to 60 MHz of 3.5GHZ (or C Band) spectrum, which has allowed the 5G rollout to continue over the last year.

'We welcomed the Government's direct allocation of the C Band spectrum in 2020, which enabled us to roll out to a number of major centres across FY21. We will continue to work with Government and other stakeholders on the longer-term 3.5GHz auction, and to enable access to the 600Mhz band - which is particularly important for rural areas because of its ability to provide 5G connectivity over greater distances than the bands that are in use today, including 3.5GHz.'

¹Based on Spark's cellular CAT-M1 IoT Coverage

²NERA Economic Consulting 2020

³Mobile edge compute reduces the physical distance from an end user to compute and networking service, reducing latency, and supporting new use cases that require real-time performance to work e.g. cloud gaming