UFB update 26 May 2015 PAGE 1 Fibre goes mainstream • UFB is a significant national broadband upgrade and Chorus and the wider industry in New Zealand are leading the world • We • • • have completed the first phase Network build is ahead of plan More than 40 RSPs are selling Chorus fibre products All RSPs now offer voice over fibre • We • • • are about to enter a new phase of UFB – fibre goes mainstream Demand for fibre is growing ahead of forecast Emergence of video streaming services The industry is making significant investments in fibre IT systems • With Chorus’ build now well under control, focus has moved to ensuring the installation experience is ready for mainstream DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 2 Network build is ahead of plan AUCKLAND (inc. Waiheke, Waiuku, Pukekohe) ROTORUA 372.200 premises 20,900 premises 31% complete 86% complete TAU PO WHAKATANE 10,000 premises 5.500 premises 100% complete 61% complete LEVIN GISBORNE 7,100 premises 12.300 premises 28% complete 33% complete 17,100 premises V, 40,900 premises 27% comple?e 42% complete WELLINGTON I FEILDING 125,500 premises 7 5,600 premises 33% complete 31% complete NELSON PALMERSTON NORTH 23,500 premises 27.900 premises 50% complete 607? complete GREYMOUTH MASTERTON 3,500 premises BLENHEIM 8,500 premises 63% complete 11,200 premises 85% complete 100% complete ASHBURTON 8,100 premises TIMARU 100% c?mpl?e 12,800 premises 95% complete OUEENSTOWN 4,900 premises OAMARU 70% complete 5,800 premises 100% complete INVERCARGILL DUNEDIN 19,700 premises 44,500 premises 56% complete 46% complete PREMISES TOTAL UFB PREMISES IN CANDIDATE AREA. EXCLUDING GREENFIELDS DOCUMENT TITLE 1.0 XX DAY 2012 PAGE 3 Retailers are on board Around 40 Retail Service Providers (RSPs) are now selling Chorus fibre plans Lots of different RSPs operate in different regions Interactive map on: https://www.chorus.co.nz/at -home/orderingfibre/getting-connected DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 4 Uptake varies from area to area 13% - 15.9% - 151% Chorus UFB Uptake by Candidate Area March 2015 15.1% 143% 14% 13.7913 115% 118% 11591312295: 11.9% 12% 11.5% 10.49% 9.3% 10% 9.4% 91% 3.1% 3/5 7.3% 69?, 5.7% 51,593 a 5.1a; 4.9% 4% 4.2% 3.6% 2% 1.9% 0% 0.0% cf.53. 61:; 3% ?nae 5e 12~33 x61 {392? (9?6 $er DOCUMENT TITLE 1.0 XX DAY 2012 PAGE 5 a? Blenheim Promoting UFB C?mplete- Congratulations Blenheim, you now have a complete ultra-last broadband network Fl I 12,500 homes, businesses, schoots and medical centres are now able to be connected We're installing the ultra-fast broadband network (Cc: Chorus em.? aw adtari'? m: K5 -- s?Calluson 0 342 733 .3 Chorus is New Zealand's largest communicationsinfrastructure . company Ceting ?br Jr? . l- in". .1 .J R?ural Broadband Investors Join our team Mus (Cit) Chorus I Check 3. broadband . Cabinetfart - working with I services at your (communities nse address Ashburton . . complete. Congratulations Ashburton you now have a complete ultra?last broadband network More than 8,600 homes, busmesses, schools and health centres are now a nd network able [0 be connected ng us, we'll be back to tidy up Vanni 251? Chorus 1.. 2: To bimd?r?nd Wald? get . -.. r. 112:: P. r_ er mr: turd om 110W mg, arm-turn? 200$}; your street is done you @2331 Wellington 6d Now Duruwoalnd be On the way to New Zea?an et ked hmked? the way It Should BAND PROVIDER To riND OUT MORE OR iriterne . c-r-aamm .. .n 'J?e cum - :a 9" . monmm . . 1? hr ""237: urn-1m?: ., mm mm mar-n? no a? 3 snared m: . mm? cm . .-. r13.? Ol :31 Ame-9.41M mum i run :In1 . n; am ?he 3 Shihh chorus game Chorus DOCUMENT TITLE 1.0 XX DAY 2012 PAGE 6 $50m investment in IT systems to support fibre Chorus continues to work with the RSPs to transition to our system, which requires RSP systems to be configured to work seamlessly with it. DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 7 The ABC of fibre installation A B Agree Build C Connect • AGREE – A Chorus technician meets with the end user at their property to scope the installation, identify any issues, and agree how the installation will occur • BUILD – Chorus builds any fibre infrastructure that is required within the property boundary without the end user needing to be present • CONNECT – A Chorus technician visits the property and connects up the fibre inside the premise. This also requires the RSP to have provided modems etc to the end user • • The ‘Agree and Connect’ steps each require the end user to be present Each connection is a construction job and each is different DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 8 Current performance volumes > New UFB connection orders in the three months to end April > 13,500 > New UFB connections installed in the three months to end April 11,000 > Number of connections already booked for installation over the next few weeks 5,000 > Number of connection orders requiring further work before an installation can be confirmed (eg RSP action, consents, build) > 5,500 DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 9 Current performance – time to install Current median time from receipt of an order to completion of the installation for a standard property – 18 calendar days ▪ This type of connection represents around 80% of installations ▪ In more than three quarters of cases either the end user or the RSP schedules the technician visits Complex installations that require consents, additional design and build work take significantly longer than standard property: > Multi-dwelling unit, such as a flat or office – median 130 calendar days > A property down a right of way - median 110 calendar days 42 • Consent • Scope • Design 115 • Build communal • Update records 125 • Connect end customer DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 10 Improving the installation experience - reschedules > Around 30% of “Connect” appointments are being rescheduled > Installation is a complex process which requires all component parts to have worked seamlessly to avoid a reschedule > There are around 30 root causes, and each cause will take significant work to reduce > Of the 30% that are rescheduled: > End users asking to change the date – about 14% ▪ Eg the previously agreed time no long suits > The RSP still needs to do something – about 3% ▪ Eg the modem still needs to be dispatched > There is a Chorus issue – about 13% ▪ Technician not available ▪ The build phase is not complete ▪ The job has not been provisioned correctly DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 11 Opportunities to improve – industry collaboration > Issue > Improving the experience for end users requires all of the industry to come together on certain aspects > Solution > Chorus has taken responsibility for bringing the industry together to agree consistent criteria for the end user experience and respective roles in implementation > Spark, Vodafone and CallPlus have all been formally involved to date. The findings will be complete in July and shared with the whole of the industry > All players will get their say DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 12 Opportunities to improve consents > Issue • The current consenting regime is onerous and adds significant • time to the process There are a large number of consent requests that get no response, meaning work can not go ahead > Solution • Legislative changes to make the consenting process more straight forward are under consideration by officials DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 13 Opportunities to improve – forecasting Issue • Demand for fibre has increased beyond industry forecast • It takes three months to train a Chorus provisioning person • It takes six months for a Chorus fibre installer to become fully competent and productive, in addition to the three months to recruit Solution • Chorus is working closely with the industry to improve and refine overall forecasting to be better able to meet changes in demand / PAGE 14 Opportunities to improve – records Issue • There is no single industry database that instantly matches fibre availability to property records, which means initial conversations with end users can be unreliable Solution • Chorus has made its fibre and property records available to the whole industry through the Chorus Portal IT system • The Chorus Portal will act as the “single source of truth” / PAGE 15 Opportunities to improve – technician skills > Issue > On occasion the quality of workmanship or the discussions with customers on their premises is not up to standard > Solution > Spot checking installations to ensure the proper processes have been followed > Focusing on technician training and workmanship, including determining the best installation type for property and location DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 16 Next steps > Collaborate with the RSPs on the customer experience > > > > programme Improvements to forecasting, records and technician skills Work with RSPs to transition onto the Chorus Portal Look for support on simplification of consenting regime Report back on progress DOCUMENT TITLE / V 1.0 / XX DAY 2012 / PAGE 17