2degrees reports NZD $1.34 billion revenue surge in 2024

2degrees has reported robust growth across key market segments in its fiscal year 2024, seeing an increase in revenue and stronger market presence.

The New Zealand telecommunications company reported a 16 per cent increase in underlying statutory EBITDA, reaching NZD $339 million. This result excluded a NZD $620 million gain from the one-off sale of passive tower assets in the prior year. Total revenue increased by 7 per cent year-on-year to NZD $1.34 billion.

"2degrees continues to increase market share across consumer and business market segments, reflective of the fact that more New Zealanders are choosing 2degrees as their provider of mobile, broadband and electricity services," stated Mark Callander, Chief Executive of 2degrees.

Detailed performance metrics highlighted significant revenue increases across the company's core products. Broadband revenue rose to NZD $415.9 million from NZD $371.6 million, mobile revenue increased to NZD $555 million from NZD $509.0 million, and energy revenue climbed to NZD $122.7 million from NZD $109.3 million.

"2degrees is well positioned as customers look for better value alternatives to lower their costs and manage the impacts of more challenging economic conditions," said Callander. He further commented, "We're achieving this level of growth because of the value, service and productivity gains we can provide to customers when they need it most. In addition, our investment in the network continues to deliver more capacity and improved 5G coverage across the country."

The company reported an increase in network and service delivery costs by 6 per cent to NZD $726.8 million, reflecting the support for revenue growth. Meanwhile, employee, administration, and other operational expenses decreased by NZD $15.4 million (5 per cent) due to disciplined cost management and integrating milestones in their operations, although some cost pressures were noted due to the inflationary environment.

Cash flow from operating activities improved by NZD $59.0 million compared to the previous year, reaching NZD $169.0 million. These funds will aid ongoing capital investments in the network and digital initiatives aimed at enhancing customer experience.

2degrees recently progressed with the merger with Vocus, which took place in 2022. Mark Callander commented on the merger's progress, "Since the merger, we have been focused on making the three-year integration programme of work as seamless as possible for our customers while transforming the business for future success."

He added, "We remain on track to meet the integration targets from a financial and technology perspective, while maintaining the challenger culture across the newly formed business."

As of November 2024, 2degrees' network encompasses 2,156 cell towers, covering 98.5 per cent of the areas where New Zealanders live and work, along with a 4,600 km owned fibre network nationwide. The company's 5G coverage has expanded to over 28 per cent nationwide, with specific coverage of more than 63 per cent in Auckland, 55 per cent in Wellington, and 52 per cent in Christchurch.

"A key area of investment has been in our technology environment and the augmentation to a single stack to meet the needs of our customers and provide better internal tools for our staff," Callander stated, emphasising, "We continue to invest in our proprietary software stack, which will be a key point of difference in our ability to deliver digital outcomes for our customers while improving our speed to market for new initiatives. Owning the technology environment will also improve opportunities for innovation across all products and markets we choose to compete in."

Looking forward, 2degrees is dedicated to maintaining its growth trajectory and continuing to be a significant player within the industry. "We understand the important role that we play in the market as a challenger and the responsibility that comes with that," said Callander. "Our objective is to keep giving Kiwi customers, whether pre-paid or large enterprises, good reasons to join us and stay with us."