Spark reported a 4 percent increase in revenue to $1.82 billion for the first half of its 2020 reporting year. It is Spark’s strongest first half revenue growth in four years.
The telco says much of the growth came from a 5.5 percent rise in mobile service revenues, which reached $653 million. Mobile margins also increased from 60 percent to 62 percent. Spark says this is the result of revenue growing faster than costs.
Jolie Hodson, Spark CEO, says the decision to shift to unlimited and high value plans helped the company beat its mobile growth targets.
Subscriber numbers were up 1.5 percent year-on-year to 2.5m. This translates to a market share growth of 1.2 percent leaving Spark on 40.1 percent, the biggest lead over its competitors since 2012.
Other high points include solid performance in cloud, security and service management growth where revenue was up 12.3 percent
Fixed-line voice revenues continued their long-term decline, dropping 11.6 percent. On a positive note, the rate of decline slowed during the half year.
Broadband revenue for the half was flat at $345 million. The company lost 3000 connections in what it described as a “highly competitive and saturated market.”
During the period Spark back-pedalled on fixed wireless broadband sales. This was in the run up to Spark Sport’s streaming coverage of the Rugby World Cup. The company acted to maximise customer experience of the games.
Spark’s EBITDA grew 2.2 percent to $500 million. Net profit after tax was 9.2 percent up on a year earlier at $167 million.
Capital expenditure dropped to $247 million. The fall was, in part, thanks to Spark completing investment in its LoRaWAN network for the Internet of Things. Other investments increased. The additional spend included installing CDNs to manage Spark Sport’s streaming service and more money going into the company’s low-profile 5G roll-out.
Spark chair Justine Smyth say the result shows the company’s three-year plan is paying off. She says: “We have made significant investments in Spark’s network infrastructure, which has improved our competitive advantage and diversified our business beyond traditional telecommunications into growth segments like digital services and sports streaming.”