August 20, 2019 / 9:37 PM / 6 months ago

UPDATE 1-Spark New Zealand annual profit jumps on lower costs, higher subscriptions

(Adds details on 5G plans, mobile revenue growth, other performance metrics)

Aug 21 (Reuters) - Spark New Zealand, which provides telecom and digital services, posted a 12.1% rise in annual profit on Wednesday, as it earned more from mobile subscribers and benefited from lower costs.

Last year, a digitisation and automation programme called “Quantum” had cost Spark NZ$49 million on a one-off basis. The programme was aimed at making it the industry’s lowest cost operator.

Meanwhile, the company on Wednesday said it maintained growth in mobile connections, revenue and average revenue per user, driven primarily through the addition of higher-value customer plans.

Net profit came in at NZ$409 million ($262.37 million) for the year ended June 30, compared with a profit of NZ$365 million a year earlier, which included the one-off cost.

Spark, which has been gearing to launch 5G services, said it was planning to offer the high-speed service from mid-2020 as part of a partnership with Emirates Team New Zealand during Auckland’s hosting of the America’s Cup.

In November 2018, New Zealand’s intelligence agency rejected Spark’s proposal to use 5G equipment from China’s Huawei Technologies, citing significant national security risks.

Earlier this week, a company spokesperson told Reuters that they had not yet made any decision on whether to submit a revised proposal.

$1 = 1.5588 New Zealand dollars Reporting by Shriya Ramakrishnan in Bengaluru; Editing by Bernard Orr and Anil D'Silva

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