5 Apr 2023

Spark unveils strategy to position itself for expected economic uncertainty

11:48 am on 5 April 2023
Spark's headquarters in Auckland.

Spark says it will invest between $250 million and $300m in data centres, and $40m-$60m in standalone 5G. Photo: RNZ / Kim Baker Wilson

Spark will prioritise investment in data centres and new technologies to fuel its growth over the next three years.

The telecommunications company will invest between $250 million and $300m in data centres, and $40m-$60m in standalone 5G, which it said would open up new commercial opportunities.

Spark chief executive Jolie Hodson said the three-year strategy from 2024 to 2026 would position the company for success in an uncertain environment.

"We see a number of supportive tailwinds ahead of us, including the continued exponential growth in data, acceleration of technology convergence, the return of international travel, and rising levels of immigration," she said.

"At the same time, we expect economic uncertainty to be a hallmark of the years ahead, and as Aotearoa gets bigger, older, and more diverse, we must ensure Spark is changing alongside it."

There was no mention of mobile satellite connectivity in Spark's three-year strategy.

It comes after rivals One New Zealand (formerly Vodafone) and 2degrees announced deals with satellite providers as they worked towards 100 percent mobile coverage.

In mobile and broadband, Spark planned to use its data capability and 5G investment to deliver the latest personalised digital experiences.

"Our dual brands of Spark and Skinny serve different ends of the price spectrum, we have a unique ability to target the right product to the right customer at the right time through data, and our 5G coverage is densifying," Hodson said.

"This sets us up to continue to grow value in mobile and to move wireless broadband towards 35 percent of our base by the end of FY26," she said.

In its high-tech portfolio, Spark would focus on the Internet of Things, standalone 5G, data and artificial intelligence, and digital identity.

The company said it would use those capabilities to continue growing its digital health services brand Spark Health.

"We have rapidly matured our high-tech capabilities over the last three years, but at this stage these technologies are operating largely independently of each other," Hodson said.

"We are now seeing the rapid acceleration of convergence - which is about bringing these different technologies together to solve business problems where it was not possible, or cost effective, to do so in the past."

In the business market, Spark would focus on growing its small-to-medium and enterprise segments by enabling customers to achieve higher productivity and better sustainability through technology, it said.

"We know the inflationary environment is hitting small businesses hard, and we are in a strong position to support our customers to unlock revenue generation and efficiency improvements," Hodson said.

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