New Zealand's telecommunications company Spark has announced its three-year growth strategy through to FY26, which prioritizes investment in data centres and emerging technologies such as 5G Standalone. Spark Chair, Justine Smyth, stated that the company has built a competitive advantage through simplification, investment in data and new technology, and building a high-performance culture.
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Spark's CEO, Jolie Hodson, says the new strategy positions Spark for success in an increasingly uncertain environment. In addition, the company is well-positioned to invest in future growth following the success of its portfolio management strategy, which yielded substantial proceeds from the TowerCo transaction last year.
Invest in Data Centres and 5G
Spark's new strategy focuses on empowering businesses and individuals, creating Aotearoa's (New Zealand) future by adapting to an environment of economic uncertainty, exponential growth in data, and acceleration of technology convergence. The company plans to invest NZD 250 - NZD 300 million in high-growth data centres and NZD 40 - NZD 60 million in 5G Standalone.
Leverage Data Capability and 5G
Spark intends to leverage its data capability and 5G investment to provide customers with the latest digital experiences personalized to their needs in Mobile and broadband. The company has strong momentum in Mobile and has stabilized its broadband base in a highly competitive market.
Spark wants to use its dual brands, Spark and Skinny, to serve different ends of the price spectrum, with the ability to target the right product to the right customer at the right time through data and growing 5G coverage.
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Spark aims to grow the small-medium and enterprise segments in the business market by enabling its customers to become more productive and sustainable through technology. Additionally, the company will invest in expanding its data center capacity and high-tech capabilities, including IoT, 5G Standalone, data and AI, and digital identity.
The company aims to leverage its IoT capabilities, which have grown from under a quarter of a million connections to 1.2 million today, to provide a platform for growth into converged solutions.
Invest in People
In addition, the company aims to invest in the development of its people, building innovation capability across the business, and delivering sustainable high performance through a focus on well-being and inclusive progression.
The company remains focused on supporting Aotearoa's economic transformation, championing digital equity, and improving its own sustainability.
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In July last year, Spark announced the sale of 70 percent of TowerCo business, with approximately 1,263 sites, for NZD 900 million to Ontario Teachers. Under the terms of the deal, Spark has entered into a 15-year agreement with TowerCo (plus rights of renewal) to secure access to existing and new towers, with a build commitment of 670 sites over the next 10 years.
In December, Connexa announced it agreed with 2degrees Mobile to acquire 2degree's passive mobile telecommunications tower assets. Connexa is an independent mobile towers business formed following the sale of a 70% stake in Spark's passive mobile infrastructure assets to the Ontario Teachers' Pension Plan in July 2022, with the transaction completed in October 2022.
The tower portfolio of 2degrees that Connexa acquired includes 1,124 mobile towers across Aotearoa, New Zealand. Under the terms of the deal, 2degrees has entered into a 20-year-agreement with Connexa (plus rights of renewal) to secure access to existing and new towers, with an additional tower build and co-location commitment of 450 sites over the next 10 years.