The Commerce Commission\u2019s most recent Telecommunications Monitoring Report, released in June, said 2degrees was the only telco to increase market share.<\/p>\n
Callander added: \u201cThere are some green shoots out there. We\u2019re very confident that in the second half of this financial year, we\u2019ll see some positive stuff happening.\u201d<\/p>\n
The Commerce Commission’s most recent Telecommunications Monitoring Report, released in June, said 2degrees was the only telco to increase market share. Image \/ Commerce Commission<\/p>\n
The telco said \u201ctrading ebitda\u201d (earnings before interest, taxes, depreciation and amortisation, adjusted for one-offs) rose by 11.5% or $40.7m year-on-year to $395.3m.<\/p>\n
Mobile revenue increased 4.8% year-on-year to $581.5m from $555.0m in the prior year, 2degrees says.<\/p>\n
Broadband revenue grew 3.9% year-on-year to $432.3m, up from $415.9m in 2024.<\/p>\n
Energy revenue saw a rise of 8.7% year-on-year to $133.4m from $122.7m.<\/p>\n
Net cash from operating activities rose from $169.4m to $237.3m.<\/p>\n
A spokeswoman said staff numbers had reduced from 1507 on June 30, 2024 to 1465 on June 30, 2025 as a three-year 2degrees-Orcon integration wrapped up and \u201cbusiness simplification\u201d measures were introduced.<\/p>\n
It was a blip next to Spark\u2019s cull of 1300 staff over the same period as it reduced its headcount to 4043.<\/p>\n
Big end of town<\/p>\n
2degrees\u2019 initial strength was in consumer and small business, but lately it\u2019s been winning more contracts a the big end of town.<\/p>\n
A signature win saw 2degrees oust incumbent Spark<\/a> for a Government contract \u2013 beginning in March this year and running through to 2031 \u2013 for a contract to supply services to 2542 schools<\/a>.<\/p>\n Callander said his firm also had \u201cbig mobile wins\u201d at corporates including Datacom, Ventia and Transpower.<\/p>\n Final integration costs<\/p>\n It was 2degrees\u2019 third full year of financials following its merger with Vocus NZ.<\/p>\n A complex deal saw Vocus NZ (trading as Orcon) sold by Australian-based Vocus Group to Voyage, a joint venture between investment bank Macquarie and Aware Super. Voyage, in turn, bought 2degrees, with the two businesses folded into each other on terms finalised in mid-2022.<\/p>\n Although it was essentially Orcon, run by Callander, buying 2degrees \u2013 thanks to its new backers\u2019 deep pockets \u2013 the merged entity has traded as 2degrees.<\/p>\n A giant, three-year upgrade project called \u201cTahi\u201d has just wrapped up. It saw two million customers move from a Big Tech firm\u2019s systems to a platform developed in-house (that is, migrating the old 2degrees customers to the Orcon\/Vocus way of doing things). Callander said it was a trade-off as in-house development costs rose but his firm freed itself from high licensing fees.<\/p>\n He said a key payoff was more flexibility, which has helped 2degrees win more corporate business as it was now able to offer customised services more quickly.<\/p>\n His Flex<\/p>\n Rivals have accused 2degrees of dropping its pants to win business. Callander told the Herald that in the bidding for a contract covering 3000 business mobiles, his company actually had the most expensive pricing in the first round of the tender, and was second-placed on price in round two. He said 2degrees prevailed because of its Flex custom-built self-service portal, enabling fleet management, while rivals had to employ third-party software to offer the same features.<\/p>\n Entering the space race<\/p>\n Spark is poised to add a mobile-to-satellite service in the New Year. The telco has yet to name its partner, other than saying it is a US-based firm. Insiders say the telco will become Starlink\u2019s second local partner, after One NZ.<\/p>\n 2degrees earlier said that it would go with a Starlink alternative, AST, part-funded by One NZ\u2019s former owner, Vodafone. AST has fewer satellites but they are higher up for broader coverage.<\/p>\n Callander said the key point of difference will be that 2degrees\u2019 AST-based service will offer voice, data and text from the get-go. One NZ\u2019s service is text-only, but with voice and data promised to follow \u2013 by year\u2019s end \u2013 as Starlink launches more of its direct to cell-compatible second-generation satellites.<\/p>\n The 2degrees\u2019 boss wouldn\u2019t be pinned to a launch date other than \u201cnext year\u201d. Work on ground infrastructure is under way, he told the Herald. (Although it\u2019s doing mobile-to-satellite business with AST, 2degrees does have Starlink ties. It wholesales the business version of Starlink\u2019s dish-based service. And via its inherited Vocus business, 2degrees also runs four Starlink ground stations in New Zealand.)<\/p>\n Power play<\/p>\n 2degrees bundles power with its plans (thanks to Orcon buying a power retailer, Switch Utilities, in 2016) and has recently joined Consumer NZ, the Employers and Manufacturers Association and others in a call for the big \u201cgentailers\u201d to be broken up \u2013 a move Callander said would be akin to Telcom\u2019s break-up into wholesale (Chorus) and retail (Spark) businesess.<\/p>\n Callander called competition between the four big gentailers a \u201ccosy pillow fight\u201d that, in his view, enabled high prices, \u201cvery happy shareholders with big dividends and an infrastructure deficit\u201d. (The gentailers say<\/a> proposed reforms would actually reduce investment, driving up power prices.)<\/p>\n Does he feel the open letter he co-signed to Prime Minister Christopher Luxon, and other measures, are having cut-through?<\/p>\n \u201cYeah, we do have positive expectations of change,\u201d Callander said.<\/p>\n \u201cWe expect something out before the end of this month.<\/p>\n \u201cThe ministers have been very good to deal with.<\/p>\n \u201cI think there is wide recognition that the market structure is broken. <\/p>\n \u201cThe Government\u2019s got this delicate balance between security of supply, obviously, and the pain that households are feeling and policy settings that aren\u2019t working. But we expect significant change.\u201d<\/p>\n How other telcos are faring<\/p>\n Spark saw a 9% net profit fall<\/a> to $316m in the year to June as its revenue shrank 3% to $3.73b.<\/p>\nThe Commerce Commission’s Telecommunications Monitoring Report had some good news for 2degrees. Source \/ Commerce Commission<\/p>\n
The Herald’s annual Mood of the Boardroom survey of 150 CEOs, released this morning, revealed the campaign for power sector reform was gaining momentum.<\/p>\n
2degrees’ Mark Callander argues the current market structure has led to an “infrastructure deficit”. <\/p>\n