Spark growth takes backward step to improve profit

In this edition:

• Spark half-year result
• National Infrastructure Plan highlights rural gaps
• One NZ offers scam protection
• Connexa adds power monitoring tool

Revenue down, headcount down, data centres sold, profit up

Spark New Zealand’s first-half result for the 2026 financial year show the cost restructure programme is repairing margins at the price of top-line growth.

The telco reported an interim profit rise of nearly 83 percent to $64 million. Yet revenue fell by around one percent to ~$1.9 billion showing the profit recovery has been driven by financial discipline rather than demand.

Reported EBITDAI rose 10.3 percent to $448 million.

Cost-cutting efforts save $51 million, in part funded by reducing staff numbers. Last year the company reported its headcount dropped from 5300 to 4000. More recently it has fallen further to around 3800.

Structural reset

Losing 1500 employees in two years is a structural reset as Spark retreats from earlier diversification initiatives.

The clearest indication of this is that Spark sells majority stake in data centre arm on 30 January 2026. Proceeds from the sale are set to reduce debt in the second-half of this financial year.

Spark says it continues to grow mobile service revenue which is up 1.6 percent. The company says this is: “...supported by strong ARPU (average revenue per user) growth in the highest value segment of consumer and SME pay monthly, and ongoing connection and ARPU stabilisation in consumer prepaid and enterprise and government."

Cost discipline, not expansion

In other words the growth has come from pricing mix and upselling, not market expansion. And with CPI running at more than three percent, 1.6 percent growth is, in real terms, a decline.

Broadband revenue is largely flat reporting growth of just 0.3 percent. Cloud revenue grew 1.7 percent to $120m as customers scaled public cloud usage. These figures are also below inflation.

There is a first-half dividend of 8 cents per share. The company reaffirmed its full year guidance with a target adjusted EBITDAI of $1,010 million to $1,070 million and free cash flow of $290–330 million.

Spark returns to mobile core

CEO Jolie Hodson highlighted the importance of mobile which: “...remains central to our SPK-30 strategy. We have delivered a return to revenue growth and ongoing connection stabilisation.

“Our strategic focus on delivering a better network and better customer experiences is central to our success, and we were pleased to maintain network coverage leadership off the back of more than 100 cell site upgrades and new builds during the half.”

One initiative yet to pay off is Spark’s plan to launch a satellite text and calling service this year to compete directly with One NZ’s existing service and 2degrees' planned response.

Hodson also pointed to AI-driven efficiency gains and improved customer satisfaction during the first half.

Chair Justine Smyth pointed to the result as a "clear step up in performance" as the company executes its five-year SPK-30 strategy.

Spark’s share price climbed two percent on the results.

National Infrastructure Plan: Rural gaps remain

The New Zealand Infrastructure Commission’s 30-year National Infrastructure Plan says while telecommunications is generally performing well in urban areas there are still gaps in rural New Zealand.

It points to persistent mobile black spots and broadband congestion outside fibre footprints, noting that service quality is uneven across the country.

The report highlights that New Zealanders' perceptions of mobile services are generally high, and the country's telecommunications infrastructure compares well against benchmark nations in several areas.

Key details

Key details from the report regarding telecommunications include:

High Public Satisfaction: In a representative survey, 90 percent of New Zealanders reported that mobile phone services meet or exceed their needs.

Performance Benchmarking: Compared to a group of similar benchmark countries (including Canada, Finland, Norway and Sweden), New Zealand’s telecommunications network ranks 3 percent higher for usage and only 4 percent lower for quality.

Infrastructure Investment: New Zealand’s investment in telecommunications infrastructure is 28 percent higher than the average of its benchmark peers.

Rollout Challenges: While the plan notes that 85 percent of New Zealanders are satisfied with internet services, it identifies that 13 percent of homes (primarily in rural areas) still lack fibre broadband access. The migration to newer technologies, including wireless and satellite, is identified as a priority to address these "digital black spots".

Efficiency vs. Spending: While New Zealand spends a high percentage of its GDP on infrastructure generally (5.8 percent), it ranks toward the bottom for efficiency, or "bang for buck," across all sectors.

SMS firewall targets scam texts on One NZ network

One New Zealand has launched an SMS firewall on its mobile network to block scam text messages before they reach customers.

Since switching it on last month, One NZ says the tool has identified thousands of fraudulent messages. This includes bank impersonation scams, fake delivery notifications and "Hi Mum" messages, blocking almost all of them before delivery.

The SMS firewall joins One NZ's existing anti-fraud measures, which include 24-hour network monitoring and biometric identity verification introduced 12 months ago to prevent SIM-swap fraud and identity theft.

In other news...

• New Zealand is getting a new streaming service — RNZ
  Sky TV loses HBO as it sets up its own offering.
• Sky TV and HBO: When streaming eats itself — Businessdesk (paywall)
  Peter Griffin looks at the implications for Sky TV.
• Amazon Leo considers allowing third party antennae — PC Mag
  Option is for enterprise and government customers.
• Starlink leaves regulators in its wake — The Register
  Leo broadband networks present new challenges.

Omni means Connexa can watch network power in real-time

Connexa says its Omni technology will allow the tower company to monitor its critical power systems in real time. Omni manages and optimises backup power availability during power outages and emergency events. This helps communities stay connected for longer, and in an outage, restore services faster.

Mobile networks are vulnerable to power outages in severe weather, especially when sites are in remote or hard to reach places. Knowing how much back-up power remains at a site is vital.

With Omni, Connexa can notify customers allowing them to maximise network uptime. As a side benefit, Connexa says smart power monitoring means less unnecessary generator use, more efficient power management practices and reduced travel to sites.

This time five years ago Auckland’s lockdown saw data traffic surge

Auckland data traffic was up 96 percent as the city went back into lockdown. The Chorus network saw a peak of 1.75 Tbps. While the February 2021 surges were huge, they paled beside those of a year earlier when New Zealanders were first sent home to work and study.

A year ago, Download Weekly reported on the poor Spark first half result and covered concerns that the 3G shutdown would disadvantage marginal users.

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