Chorus Turns the Page: From Copper Utility to AI-Ready Fiber Infrastructure
FY26 results show a resilient core, but the real story is the build-out of adjacent infrastructure — subsea cables, battery storage, and precision timing — as Chorus positions itself for the data-center boom.
CNU.NZ · Earnings Call · 2026-08-23
FY26: A Solid Base
Chorus reported a strong year, with fiber connections up 3% to over 1.1 million and fiber uptake at 75.9%. EBITDA rose 3% to $726 million, and net profit improved to $37 million. The company raised its dividend by 4.3% to $0.60 per share. But the most notable development is what CEO Mark Aue calls the "transition to an all-fiber business" — and the strategic roadmap beyond it. Discussions with analysts centered on how the company plans to diversify its infrastructure portfolio, with subsea cable feasibility and battery energy storage trials taking center stage.Thematically, we see data centers and AI creating the next major wave of demand for network connectivity.
Beyond Fiber: Building an Infrastructure Pipeline
Chorus is no longer satisfied being just a passive fiber duct. Under its Horizon 2 strategy, the company is actively launching new products: TimeSync, a precision timing service; Express Connect; and Unified Transport. These are small today, but they signal a shift toward leveraging the network's unique assets. The most exciting opportunity, though, is the potential inter-island subsea cable, with CapEx estimated at $60–80 million over three years. As Aue explained, “It's essentially linking the two islands with terrestrial fiber, and we just think about that as wet fiber.” — Mark Aue · 2026-08-23 The company is also trialing BESS installations at five sites, with the possibility of scaling to several hundred properties. These initiatives are designed to increase utilization of existing network assets and open new revenue streams.
The AI Wave: Why Fiber Is the Quiet Enabler
Chorus's biggest narrative shift is its alignment with the global AI and data-center theme. Mark Aue highlighted that “the scaling of AI requires 4 key infrastructure components: land, power, cooling and fiber.” — Mark Aue · 2026-08-23 With major data-center announcements in Makarewa and Stratford, New Zealand is entering a new era. Chorus's 200,000-kilometer fiber footprint is a strategic moat, and the company is already seeing the benefits: average monthly fiber usage rose 9% to 731GB, and 21% of customers now consume over 1TB per month. This is exactly the kind of demand that justifies Chorus's continued investment in high-capacity connectivity.
Despite competition from satellite providers like Starlink, Aue remains confident: “We still see a significant differential between the technologies, between fiber and Starlink.” — Mark Aue · 2026-08-23 He stressed that fiber is "fit for a lifetime" and that the key is raising awareness rather than altering the product.
Capital Management and Regulatory Tailwinds
The company's financial discipline remains intact. With net debt at $3.2 billion and under Moody's 5.25x threshold, Chorus is comfortable. CFO Drew Davies pointed out the dividend policy: “Our capital management policy is that we have a growing sustainable dividend in real terms.” — Andrew Davies · 2026-08-23 The removal of legacy shareholder caps is another positive, simplifying the corporate structure.
“Our dividend policy is set through Horizon 2, right, growing dividend in real terms.” — Andrew Davies · 2026-08-23
The company's pivot is a clear response to the structural shift in data demand. While the copper retirement is a tailwind, the real upside lies in the new infrastructure opportunities. The market is watching to see if Chorus can execute on these high-potential projects while maintaining its credit profile. With a 4.75x leverage and a clear pipeline, Chorus is positioning itself as a core enabler of New Zealand's digital future.