CHORUS LIMITED — Interim / Quarterly Report 2018

Jan 17, 2018

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Chorus Limited Level 10, 1 Willis Street P O Box 632 Wellington 6140 New Zealand

Email: company.secretary@chorus.co.nz

MARKET ANNOUNCEMENT

18 January 2018

Chorus Q2 FY18 Connections Update

Line trends for the Q2 period to 31 December 2017 were largely consistent with Q1

• total fixed line connections declined by 23k to 1,559,000 (-20k in Q1)

• non-broadband copper lines declined by 20k, (-17k in Q1)

• total broadband connections declined by 3k to 1,181,000 (-2k in Q1)

Fibre uptake in UFB areas now 42%, up from 39% in September

• fibre connections grew by 34k, vs 36k in Q1

• 64% of mass market fibre connections on 100Mbps and 20,000 connections on gigabit service

• VDSL growth slowed to 26k from 50k in Q1, reflecting retailer migration activity

• 58% of broadband connections now on VDSL or fibre, up from 53% at 30 September

Adoption of video streaming continues to drive growth in data demand

• new peak of 1,328 gigabits per second network throughput at 9:25pm on 10 December

• 174GB monthly average household data usage in December, up from 162GB in September

ENDS

For further information:

Brett Jackson Investor Relations Manager Phone: +64 4 896 4039 Mobile: +64 27 488 7808 Email: brett.jackson@chorus.co.nz

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Q2 FY18 Connections Update 18 January 2018

Q2 FY18 OVERVIEW

> Line trends for the Q2 period to 31 December 2017 were largely consistent with Q1

• total fixed line connections declined by 23k to 1,559,000 (-20k in Q1)

• non-broadband copper lines declined by 20k, (-17k in Q1)

• total broadband connections declined by 3k to 1,181,000 (-2k in Q1)

> Fibre uptake in UFB areas now 42%, up from 39% in September

• fibre connections grew by 34k, vs 36k in Q1

• 64% of mass market fibre connections on 100Mbps and 20,000 connections on gigabit service

• VDSL growth slowed to 26k from 50k in Q1, reflecting retailer migration activity

• 58% of broadband connections now on VDSL or fibre, up from 53% at 30 September

> Adoption of video streaming continues to drive growth in data demand

• new peak of 1,328 gigabits per second network throughput at 9:25pm on 10 December

• 174GB monthly average household data usage in December, up from 162GB in September

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Q2 FY18 CONNECTIONS UPDATE

Q2 CONNECTION TRENDS

• Total connections reduced by 23,000 to 1,559,000

  • a reduction of 20,000 copper lines with no broadband (including unbundled connections)

  • a decrease of 3,000 total broadband connections to 1,181,000

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----- Start of picture text ----- 30 Sept 31 Dec 31 March 30 June 30 Sept 31 Dec2016 2016 2017 2017 2017 2017Unbundled 105,000 99,000 90,000 82,000 76,000 68,000 1800000copper1600000Baseband 354,000 343,000 328,000 313,000 302,000 290,000 Baseband copper1400000copper(no broadband) Unbundled copper1200000Fibre 203,000 231,000 259,000 292,000 328,000 362,000broadband 1000000 Copper ADSL(GPON)800000VDSL 179,000 199,000 224,000 244,000 294,000 320,000(includes 600000naked)400000Copper 847,000 784,000 716,000 650,000 562,000 499,000 VDSLADSL 200000(includes naked) 0 Fibre (GPON)Data 10,000 9,000 9,000 8,000 7,000 7,000services(copper)Fibre 13,000 13,000 13,000 13,000 13,000 13,000 Data services (copper) Fibre premium (P2P)premium Fibre broadband (GPON) VDSL(P2P)Copper ADSL Unbundled copper (no broadband)Total 1,711,000 1,678,000 1,639,000 1,602,000 1,582,000 1,559,000 Baseband copper (no broadband)connections----- End of picture text -----

FIBRE UPTAKE & USAGE

• 42% uptake with 343,000 connections within UFB deployed footprint (Q1: 39% uptake and 309,000 connections)

  • 64% of mass market fibre connections on 100Mbps

• monthly average data usage per connection on our network grew to 174GB from 162GB in Sept 2017

• 250GB on fibre (Sept: 251GB)

• 141GB on copper (Sept:128GB)

• less than ¼ of fibre connections on entry level 50Mbps

• 20,000 connections on gigabit plans

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----- Start of picture text ----- Total mass market fibre uptake by plan type100908070% ofplans 6050403020100Jun-16 Sep-16 Dec-16 Mar-17 Jun-17 Sep-17 Dec-1750Mbps 100Mbps 200MbpsGigabit Education Business 100Mbps+----- End of picture text -----

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----- Start of picture text ----- Monthly average data usage per connection on our network300250GB200150100GB 50Copper Fibre Average0----- End of picture text -----

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Q2 FY18 CONNECTIONS UPDATE

CONNECTION SPEED

• With 58% of broadband connections now on VDSL or fibre, average broadband speed has increased from 59Mbps in Sept 17 to 64Mbps in Dec 17.

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----- Start of picture text ----- 1,400,000 701,200,000 601,000,000 50800,000 40600,000 30400,000 20200,000 100 0May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 Nov-14 May-15 Nov-15 May-16 Nov-16 May-17 Nov-17ADSL ADSL2+ VDSL2 GPON Average Connection Speed 5Active ConnectionsAverage Connection Speed (Mbps)----- End of picture text -----

Q2 FY18 CONNECTIONS UPDATE

CONNECTION SPEED HISTOGRAM – 31 Dec 2017

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----- Start of picture text ----- 250,000200,000~300,000 ADSL customers150,000 could upgrade to VDSL orChorus fibre100,00050,0000Number of Connections1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45 47 49 51 53 55 57 59 61 63 65 67 69 71 73 75 77 79 81 83 85 87 89 91 93 95 97 99 101 103 105 107 200----- End of picture text -----

Connection Speed (Mbps)

ADSL ADSL2+ VDSL2 GPON

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Q2 FY18 CONNECTIONS UPDATE