2degrees records maiden profit of $13.4m
2degrees chief executive Stewart Sherriff today announced that his company’s turned a maiden profit of $13.4 million in 2016. Photo / file
Telco 2degrees recorded its first profit in 2016 as it doubled the size of its broadband subscriber base, it was announced today. The 7-year-old mobile and broadband provider filed its 2016 financial statements today, which show a revenue of $702.7 million and a $13.4m profit. Company chief executive Stewart Sherriff said its post-paid mobile customer base also grew by 19 per cent.
“Last year was a turning point for 2degrees.
Total revenue grew as average customer revenues increased, while network costs reduced as we completed a mobile network extension programme. Our mobile customers enjoy 97.5 per cent coverage,” he said.
“It was also the first full year of 2degrees broadband, with customer numbers growing more than 100 per cent as our full-service bundle gained traction in the consumer market and our Telecommunications as a Service (Taas) offering attracted large government organisations such as Ministry for Primary Industries.”
Last year 2degrees recorded a $33.1m loss, but Sherriff said this had been due to investment in the company and had been in line with its plans. He said 2degrees was maturing as a company, with schemes like “data clock”, which offers time-based data for prepay customers, and New Zealand’s first unlimited mobile data plan.
“What started as a prepay mobile price play has become so much more, with national mobile and broadband networks serving all market segments,” he said. While doubling the company’s broadband base was a major contributor to the positive result, growing the number of post-paid mobile customers increased the average revenue per user. The completion of the company’s network expansion had also reduced costs, he said.
The company was also looking at opportunities in rural New Zealand and was part of the Rural Connectivity Group to deliver the government’s RBI2 network, which would see it invest in shared infrastructure with competitors while continuing to compete at the retail level. Sherriff said the biggest opportunities for growth in the year ahead were in the fixed broadband market.
“I think there’s a huge opportunity to be a total telco for our customers, so supply them with both broadband and mobile. We don’t see ourselves as a mobile company or a fixed company, we’re a total telco.”
He said 2degrees’ mobile market share on a subscription basis was 23 per cent.