CHORUS LIMITED — Interim / Quarterly Report 2023

Oct 9, 2022

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

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Email: company.secretary@chorus.co.nz

STOCK EXCHANGE ANNOUNCEMENT

10 October 2022

Q1 FY23 overview

Total fibre connections increased by 21k to 980,000 (Q4 FY22: +20k)

Fibre uptake across the completed UFB footprint grew to 71% (rounded) with deployment continuing

• 1.2% increase in the quarter while the fibre footprint passed another 6,000 customers

• mass market fibre broadband connections increased by 20k

• uptake reached 75% (+1%) in UFB1 areas and 51% (+1%) in UFB2 areas

• Auckland reached 80% (+1%) uptake, while Wellington grew to 69% (+1%)

• the fibre rollout was recently completed in Pukenui, Taipa, Tairua, Tokomaru, Martinborough and Otautau

Total broadband connections increased 1k to 1,190,000 * (Q4 FY22: -1k)

• 6k connections were added in Chorus UFB areas

• 1Gbps connections were about one-third of residential fibre adds in Q1

• 1Gbps and Hyperfibre (2-8Gbps) connections now 24% of residential and business connections

Copper broadband and voice connections declined by 27k (Q4 FY22: -33k)

• voice only disconnections were -8k (Q4 FY22: -12k)

• copper withdrawal: 177 copper broadband cabinets no longer have active customers (Q4 FY22: 84 cabinets)

• total fixed line connections declined by 7k to 1,297,000* (Q4 FY22: -13k)

Average monthly data usage on fibre was 554GB in September (June: 567GB)

• daytime network traffic data indicates continued return of workers from home to the office

*totals exclude ~9,000 broadband connections Chorus is partly subsidising for student households

Authorised by: JB Rousselot Chief Executive Officer

ENDS

For further information:

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Steve Pettigrew Head of External Communications Mobile +64 (27) 258 6257 Email: Steve.Pettigrew@chorus.co.nz

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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Q1 FY23 Connections Update
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10 October 2022

Q1 FY23 overview

Total fibre connections increased by 21k to 980,000 (Q4 FY22: +20k)

> Fibre uptake across the completed UFB footprint grew to 71% (rounded) with deployment continuing

• 1.2% increase in the quarter while the fibre footprint passed another 6,000 customers

• mass market fibre broadband connections increased by 20k

• uptake reached 75% (+1%) in UFB1 areas and 51% (+1%) in UFB2 areas

• Auckland reached 80% (+1%) uptake, while Wellington grew to 69% (+1%)

• the fibre rollout was recently completed in Pukenui, Taipa, Tairua, Tokomaru, Martinborough and Otautau

> Total broadband connections increased 1k to 1,190,000 * (Q4 FY22: -1k)

• 6k connections were added in Chorus UFB areas

• 1Gbps connections were about one-third of residential fibre adds in Q1

*totals exclude ~9,000 broadband connections Chorus is partly subsidising for student households

• 1Gbps and Hyperfibre (2-8Gbps) connections now 24% of residential and business connections

> Copper broadband and voice connections declined by 27k (Q4 FY22: -33k)

• voice only disconnections were -8k (Q4 FY22: -12k)

• copper withdrawal: 177 copper broadband cabinets no longer have active customers (Q4 FY22: 84 cabinets)

• total fixed line connections declined by 7k to 1,297,000* (Q4 FY22: -13k)

> Average monthly data usage on fibre was 554GB in September (June: 567GB)

• daytime network traffic data indicates continued return of workers from home to the office

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Auckland fibre uptake reaches 80%

> Total UFB uptake of 71% (rounded) within completed footprint in Q1*

• uptake in UFB1 areas grew from 74% to 75%

• uptake in UFB2 areas grew from 50% to 51%

• 938,000 connections (Q4 FY22: 919,000) now within completed footprint, including business premium connections

• 1,330,000 customers able to connect (Q4 FY22: 1,324,000)

• 1,042,000 premises passed** (Q4 FY22: 1,037,000) out of 1,054,000 target = UFB rollout 99% complete

(note: data includes some UFB2 areas that have been partially built, but not yet submitted for Crown sign-off)

> 26,000 fibre installations completed in Q1 (Q4 FY22: 25k)

• customer satisfaction reduced from 7.8 to 7.7

• WIP reduced from 14k to 13k

• field crews reduced from ~520 to ~450 due to resourcing challenges

UFB uptake by quarter

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85%
80%
student
75% holidays
70%
65%
60%
55%
50%
Auckland Dunedin Wellington
Sep-21 Dec-21 Mar-22 Jun-22 Sep-22
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• Auckland, Wellington and Dunedin cover >70% of UFB1 homes and businesses able to connect

• 91% of Chorus’ broadband connections in our planned UFB zone are now on fibre

• includes ~3k partly subsidised education connections

• **under the UFB contract, a multi-dwelling unit or single office block is one premises

3

Mass market fibre connections grew 20k

• 300Mbps plans account for 68% of residential connections

• ~1/3 of residential fibre adds were 1Gbps plans in Q1

• 1Gbps and Hyperfibre uptake now 24% across residential and business broadband connections

Residential

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900,000
800,000
700,000
600,000
500,000
400,000
300,000
200,000
100,000
0
Sept 2021 Dec 2021 Mar 2022 June 2022 Sept 2022
1Gbps 300Mbps 200Mbps 100Mbps <100Mbps Voice
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Business

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100,000
90,000
80,000
70,000
60,000
50,000
40,000
30,000
20,000
10,000
0
Sept 2021 Dec 2021 March 2022 June 2022 Sept 2022
1Gbps 500Mbps 300Mbps 200Mbps 100Mbps <100Mbps Voice
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Fibre comprises 76% of Chorus connections

	30 Sept	31 Dec	31 March	30 June	30 Sept
Unbundled copper (no broadband) Baseband copper (no broadband)	2021 8,000 127,000	2021 6,000 119,000	2022 3,000 112,000	2022 1,000 102,000	2022 1,000 94,000	1,200,000 1,400,000	Copper ADSL Unbundled copper Baseband copper
Copper ADSL (includes naked)	152,000	142,000	133,000	122,000	112,000	1,000,000	VDSL
VDSL	148,000	138,000	128,000	118,000	109,000	800,000
(includes naked)
Fibre broadband (GPON)	883,000	907,000	929,000	949,000	969,000	600,000	Fibre (GPON)
Data services (copper)	2,000	2,000	2,000	2,000	1,000	400,000
Fibre premium	11,000	11,000	10,000	10,000	11,000
(P2P) Total connections	1,331,000	1,325,000	1,317,000	1,304,000	1,297,000	200,000
						0	~~Business premium~~
						30-Sep-21 31-Dec-21			31-Mar-22		30-Jun-22		30-Sep-22

> 1,190,000 broadband connections comprises:

▪ 969,000 fibre (GPON) connections

• 221,000 VDSL/ADSL (copper) connections

Note : 9,000 partly subsidised education connections are excluded from this data

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Connection changes by Zone (indicative as at 30 Sept)

Quarterly change (’000s) by zone*

6 4 7 9 7 -2 -3 -2 -2 -1 -3 -2 -2 -3 -3 -6 -8 -7 -6 -8 -1 -2 -1 -2 -1 -1 -2 -2 -2 -3 -10 -5 0 5 10 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Other fibre company (LFC) zone Non-UFB zone Chorus UFB zone**	6 4 7 9 7 -2 -3 -2 -2 -1 -3 -2 -2 -3 -3 -6 -8 -7 -6 -8 -1 -2 -1 -2 -1 -1 -2 -2 -2 -3 -10 -5 0 5 10 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Other fibre company (LFC) zone Non-UFB zone Chorus UFB zone**	6 4 7 9 7 -2 -3 -2 -2 -1 -3 -2 -2 -3 -3 -6 -8 -7 -6 -8 -1 -2 -1 -2 -1 -1 -2 -2 -2 -3 -10 -5 0 5 10 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Other fibre company (LFC) zone Non-UFB zone Chorus UFB zone**	6 4 7 9 7 -2 -3 -2 -2 -1 -3 -2 -2 -3 -3 -6 -8 -7 -6 -8 -1 -2 -1 -2 -1 -1 -2 -2 -2 -3 -10 -5 0 5 10 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Other fibre company (LFC) zone Non-UFB zone Chorus UFB zone**	6 4 7 9 7 -2 -3 -2 -2 -1 -3 -2 -2 -3 -3 -6 -8 -7 -6 -8 -1 -2 -1 -2 -1 -1 -2 -2 -2 -3 -10 -5 0 5 10 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Other fibre company (LFC) zone Non-UFB zone Chorus UFB zone**	6 4 7 9 7 -2 -3 -2 -2 -1 -3 -2 -2 -3 -3 -6 -8 -7 -6 -8 -1 -2 -1 -2 -1 -1 -2 -2 -2 -3 -10 -5 0 5 10 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22 Other fibre company (LFC) zone Non-UFB zone Chorus UFB zone**
		-3 -3			Other fibre company (LFC) zone	Broadband connections	32,000	Disconnections continue due to Local Fibre Company and fixed wireless provider activity, with some slowdown due to COVID-19 effects.
		-3 -2
		-3 -2 -2 -1 -2 -2				Copper line (no broadband)	18,000
						TOTAL	50,000
Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22		-2 -2 -1 -1 -2 -1			Non-UFB zone	Broadband connections	140,000	Some expansion of wireless broadband footprint through Government backed programme. New housing outside of UFB zone driving fibre premises growth.
						Copper line (no broadband)	28,000
		-3 -2				TOTAL	168,000
		-2 -1
Q1 FY23 Q4 FY22 Q3 FY22 Q2 FY22 Q1 FY22					Chorus UFB zone**	Broadband connections	1,018,000	Continued broadband growth driven by Chorus incentives and migration campaigns. Copper voice disconnections reflect migration to fibre and targeted fixed wireless activities.
		-8	7
		-6	9			Copper line (no broadband)	49,000
		-7	7
						TOTAL	1,067,000
		-8	4
		-6	6

Broadband connections

Copper (no broadband) connections

• Excludes 9k partly subsidised education connections and 12k fibre premium and data services (copper) connections ** Includes planned Chorus UFB1, 2 and 2+ coverage

6

Managed migration programme lifts connections

Managed migration programme

• 10k managed migration installations completed in Q1 (Q4 FY22: ~10k)

• marketing activity drove activation of installed fibre sockets (ONTs) from ~9k to ~10k in Q1

• 45% of these activations were at offnet addresses

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18,000
16,000
14,000
12,000
10,000
8,000
6,000
4,000
2,000
0
Q1 FY22 Q2 FY22 Q3 FY22 Q4 FY22 Q1 FY23
Installations Connections
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7

Monthly average data usage on fibre 554 gigabytes

Monthly average data usage per connection on our network*

• Reduction in fibre/average usage likely reflecting continued return of workers from homes to offices

• 554GB on fibre (June:567GB)

• 290GB on copper (June:282GB)

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600
554
500
504
Data 400
usage
(GB) 300
290
200
100
Copper Fibre Average
0
includes upstream traffic from June 2020 onwards
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• 504GB average (June:508GB)

• Average peak throughput on our network at peak time (~9pm) was consistent at 3.3Tbps

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8

Commerce Commission broadband testing report

• The Commerce Commission’s Measuring Broadband New Zealand , Winter Report (August 2022) continues to highlight the strong performance of fibre relative to other technologies, particularly for download, upload and latency.

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Source: Commerce Commission

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