Chorus Accelerates Copper Retirement as Fibre Uptake Hits 75.9 Percent

Fibre Growth Drives Revenue and Profit Surge

Chorus Limited (NZX:CNU) has delivered a robust financial performance for the year ended 30 June 2026, underpinned by continued fibre uptake and disciplined cost control. Total revenue increased 1.5% to NZD 1.029 billion, buoyed by a 6% rise in fibre revenues that offset declines in legacy copper services. Net profit soared 825% to NZD 37 million, reflecting improved operating efficiency and lower depreciation costs as copper assets accelerate their exit.

The company’s fibre connections climbed by approximately 32,000 to 1.147 million, now representing 96% of total connections. Fibre uptake in areas where Chorus fibre is available reached 75.9%, edging closer to the company’s 80% target by 2030. Uptake growth was particularly strong in earlier Ultra-Fast Broadband (UFB1) areas, with Wellington and Dunedin leading at 79%.

Copper Retirement Accelerates, Simplifying Network Footprint

Chorus is fast-tracking its copper network retirement, now targeting a nationwide shutdown by 2028, two years ahead of previous plans. Copper connections declined by 48,000 over FY26, leaving just 743 copper lines in Chorus fibre areas and 43,000 in non-fibre zones. The transition to an all-fibre network is materially complete in fibre zones, with fewer than 1,000 copper connections remaining to migrate.

This accelerated copper exit is supported by a multi-year property optimisation programme, aiming to rationalise sites and infrastructure that supported legacy networks. The company is also scaling its copper recycling initiative, which is expected to generate net proceeds of NZD 50-70 million by 2030, subject to market conditions.

Cost Discipline and Capital Allocation

Operating expenses fell NZD 6 million to NZD 303 million, benefiting from reduced copper fault volumes, lower consulting fees, and efficiency gains from operating model changes. Capital expenditure was also trimmed by NZD 40 million to NZD 375 million, reflecting project phasing and lower discretionary spend.

Net cash flows from operating activities rose 4% to NZD 740 million, enabling a final dividend of 36 cents per share and a total FY26 dividend of 60 cents per share. The dividend reinvestment plan was not available for the final dividend.

Expanding Digital Infrastructure Services

Beyond fibre growth, Chorus is diversifying its infrastructure offerings. It launched Express Connect, a data centre service for rapid and reliable data movement, and Unified Transport, a streamlined data transport product. The company is also rolling out TimeSync, a national precision timing network, and assessing a potential North-South Island subsea cable to enhance connectivity resilience.

Trials of battery energy storage systems (BESS) across Chorus properties are underway, reflecting a broader strategy to leverage its extensive asset base for adjacent revenue streams.

Positioning for AI-Driven Demand

Chorus highlighted artificial intelligence as a key driver of future fibre demand. The network’s low latency and symmetrical bandwidth capabilities are well-suited to AI-enabled applications, which require balanced upload and download speeds. Average monthly data usage on the Chorus network rose 9% year-on-year to 731GB in June 2026, with upload traffic growing faster than downloads.

The company forecasts that AI could represent up to 30% of global network traffic by 2034, underscoring the strategic importance of scalable fibre infrastructure. Chorus is preparing for this shift by expanding high-speed fibre plans, including hyperfibre offerings up to 8Gbps, and targeting 80% fibre uptake by 2030.

Sustainability Progress and Regulatory Developments

Chorus continues to improve its environmental footprint, achieving a 43% reduction in Scope 1 and 2 emissions from its FY20 baseline and cutting electricity consumption by 7% versus FY25. The company’s science-based emissions targets have been validated by the Science Based Targets initiative (SBTi).

Regulatory changes are also underway, including the proposed removal of shareholder ownership caps, which Chorus plans to address via an annual shareholders meeting special resolution in November 2026. The company is actively engaging with government on copper service retirement and regulatory simplification.

Guidance and Outlook

Looking ahead, Chorus expects FY27 EBITDA to range between NZD 730 million and NZD 760 million, with gross capital expenditure of NZD 375 million to NZD 415 million. The company has set a minimum dividend guidance of 62 cents per share for FY27, with partial imputation expected. Fibre price adjustments are scheduled to take effect from January 2027.

Chorus’ strategic focus on fibre growth, cost discipline, and infrastructure expansion positions it to capitalise on New Zealand’s evolving digital landscape, particularly as AI and data centre demand reshape connectivity needs.

With its fibre regulated asset base recently reported at NZD 6 billion, Chorus continues to balance growth ambitions with prudent financial management and sustainability commitments, navigating the transition to an all-fibre future while unlocking value from legacy assets. fibre regulated asset base