Earnings Transcript for SPK.AX - Q2 Fiscal Year 2021

Jolie Hodson: Good morning, and welcome to Spark's Half-Year Results Announcement for the last 6 months to 31 December 2020. I'm joined here today, CFO, Stef, who will take you through the financials in more detail, and we'll then take some Q&A. For the first half, we have adapted to the implications of the pandemic. We've ensured our networks have sustained for New Zealanders, while we're focused on offsetting the implications of the COVID-19 border closures on our top line through disciplined cost management. We've supported New Zealand's recovery by investing in critical 5G infrastructure, digital skills for small business and bridging the devices in local community. While the economy is showing more encouraging signs of recovery and to date, we've seen lower levels of collection risk than we anticipated, there is still a high degree of uncertainty due to new disease variance, recent lockdowns and the borders remaining closed. These border closures have impacted the broadband and prepaid markets, resulting in approximately 44,000 fewer people migrating to New Zealand in H1 FY '21 versus the same half last year, and it's led to some heightened competition for the remaining connections in those markets. So within that context, I'm pleased to say, revenue decreased 1.5% to $1.796 billion. That was due the loss of the higher-margin mobile roaming revenue, and that's from the border closures I've touched on, and also some higher voice revenue declines due to a nonrecurring provision to refund historical wire maintenance charges. I'm pleased to share the impact on revenue was offset through our disciplined cost reduction, with EBITDAI holding steady at $502 million, a 0.4% increase on the first half of FY '20. Impact reduced 11.4% to $148 million as a result of higher depreciation and amortization charges, which Stefan will touch on more in the financials. So now as we look ahead, the cumulative FY '21 EBITDAI impact of COVID-19 is expected to be around $50 million, and that's speaks to our original estimate of around $75 million. And that's a line we're seeing economy recover faster than we thought and a lower level of collection risk than we originally anticipated. As a result, we've narrowed the full year EBITDAI guidance range to $1.1 billion to $1.13-odd-billion, and the full year dividend guidance to $0.25 per share, kind of just distributed, and it's obviously subject to no excess change in operating outlook. So before turning, I'd now like to unpack the underlying performance of some of our key business lines further. So while our mobile service revenue did decline $5 million or 1.2%, Spark's underlying performance remains strong. When you strip out the impact of $21 million of loss of outbound roaming, mobile service revenue increased 3.8% from the first half FY '20. We grew our share by 0.2 percentage points to 40.4% when compared to the same time last year, and it was driven by strong growth in pay monthly connections of $68,000 year-on-year. And while prepaid connections were down and that was in line with the contracting market and travelers, a shift to Endless plans contributed to an increase in prepaid ARPU of 8.1%. As I noted earlier, the broadband market was impacted by line migration, heightened competition and is combined with some execution challenges meant we did not see the growth in connections that we aspired to. We have improvement plans in for H2 to improve the trajectory, but we do acknowledge the borders are likely to remain closed this year. We remain committed to the medium-term target of 30% to 40% of our base on wireless by FY '23 and the customer and cost benefits at the full deliver. There is a significant wireless broadband addressable market which continues to grow as we roll out 5G and precision marketing is helping us to identify customers who are best suited to wireless broadband and to broaden them with more compelling tailored offers. We continue to experience growth in cloud, security and service management revenues, and they increased 4.6% to $229 million. That was driven by strong momentum in service management revenues as we completed transitions, which converted into ongoing work. Finally, we've seen some good growth in collaboration revenue, up 4.2% versus a year ago, and that's really on the back of more products being used as people work in more flexible situations on the back of the COVID changes. So if I turn now to our strategic update on Slide 6. We're now 6 months into the new 3-year strategy, and we're focused on how our world-class capabilities will enable us to reignite our revenue momentum as the New Zealand economy begins to recover. Our focus on delivering simpler, more insured customer experiences is progressing well. Within the launch of our new Spark app, we've got a further 18% of customer care interactions now being self-solved digitally and more than 100 legacy plans have already been retired, with customers shifting to products that meets their DNA. We're also introducing a new frontline operating model where we are cross-skilling our customer care teams to improve fiscal resolution. It's an important part of driving higher customer engagement and productivity. Our work on precision marketing and propensity models is leading to more targeted relevant offers to customers and higher take up rates alongside greater marketing efficiency with a 9% improvement in spend to revenue ratio. We're continuing to migrate our data infrastructure into the cloud to enable this work. We've got 5G available in 5 locations across New Zealand, and we're now live and testing and Christchurch, and we'll obviously be rolling out the broadband offers and mobile offers to customers next month in relation to Christchurch. The OTN 2.0 network is providing greater automation and additional network resilience. We've also continued to improve our Agile maturity across all parts of our business, while adapting to the new flexible ways of working, which we introduced to support COVID-19. And we've seen digital leadership and development programs have also been delivered to a significant amount of our leaders in this first 6 months by keeping that talent development appearing, even though there's been quite a degree of change in the way we work. So if we look ahead to our future markets, we're making steady progress in our feature markets with Internet of Things connections growing by 65% during the half. Our digital health platform is in development, and we see this playing an important enabling role in the digitization of the health care sector that is planned. New Zealand summer cricket has been successfully delivered and well received by Spark Sport customers. And the foundations we're building here within these future markets are important to our aspiration for long-term revenue growth. I turn now to infrastructure assets. We recognize there's an increasing interest in investment and quality infrastructure assets, of which we own a significant portfolio across towers, fiber and backhaul networks, data centers and subsea cables, so we're reviewing investment and partnership opportunities to maximize the economic value of these asset classes while maintaining the relevant ownership rights mystery to retain competitive advantage. Our desire is to drive greater capital efficiency, increase network resilience and better customer experiences, and we'll update you on the progress of that review at our full year results presentation in August. I now just turn to the forecast for the H '21 indicators of success, which are on Slide 9. We are successfully delivering on a number of those key indicators, including improving data-driven insights, building out our 5G rollout, growing the key markets of cloud and IoT, delivering a successful summer of cricket with 99.9% uptime, and we're also building a more sustainable Spark with a focus on our emission reduction target while delivering this cost. There are a few key areas that do require corrective action in the second half, most of which I've already touched on. So if I start with consumer and small business iNPS. We have rebased the survey to be more holistic across our base. We've also -- I've also noted earlier that we've moved to a more flexible operating model and have experienced some initial cross-skilling challenges. This is being addressed, so through improved training, tooling and with a focus on our results SKUs where our more challenging customer service issues are managed. I noted before around mobile service revenues being impacted by roaming. We've also seen a bit of a shift towards our fitting on Endless plans, but we still grew the underlying service revenue at 3.8%. While the broadband connections I've touched on and we have the mitigation plans in place half 2, and that'll focus on better propensity modeling to get our target offers and ensure they remain competitive in a market that has -- have increasingly become competitive. We continue to work with our community partners and different crowd agencies to bridge the digital equity gap, and with our focus on improving the number of connected clearinghouses. So now then I'll pass over to Stef who will take you through the financials before we open up to Q&A.

Stefan Knight: Thanks, Jolie, and good morning, everybody. It's my pleasure to take you through the half year results for FY '21. So starting with the summary of key financials set out on Page 11 of the results presentation. So Spark generated revenues of $1.796 billion, down $28 million or 1.5% compared to the prior year. EBITDAI was $502 million, up $2 million on the prior year. Net profit after tax was $148 million and down $19 million compared to the prior year due to an increase in depreciation and amortization, which I'll touch on more shortly. Pleasingly, free cash flow of $113 million was up $63 million compared to the prior year. And as a result, we confirmed gain on dividends at $0.125 per share fully imputed. The strength in free cash flow also give us the confidence to remove the guidance range for the dividends, for the full year dividend and guide for a full year dividend of $0.25 per share fully imputed. So I'll now stick you through some of those elements in a bit more detail. So starting first with our revenues, the $28 million decline in revenue was primarily driven by 2 factors. So the first key driver of the revenue decline was the impact of the nonrecurring $17 million provision for -- to refund historical wire maintenance charges. So we have a wire maintenance service available to our customers within home wiring. It is common across the industry and was created to help customers avoid cost associated with some in-home wiring hosts. The service was originally developed for copper-based customers, but in recent years, it's also been available for fiber customers. While some fiber broadband customers have benefited from the wire maintenance service. Overall, it hasn't been as significant as we would have liked. And we therefore, decided to remove the service on fiber, and we will be processing a refund to these customers. As part of our ongoing drive to simplify the business, we have retired this product and with a declining customer base, the impact of revenue going forward is negligible. It is worth noting that the underlying trend in voice is a decline of 12%, which is consistent with prior trends. So the second key driver of the revenue decline was the impact of COVID and the associated border closures, which resulted in a loss of $26 million of high-margin mobile roaming revenues. As a result, mobile service revenues declined by $5 million or 1.2%. However, on a more positive note, underlying service revenue when the impacts of roaming are excluded grew by 3.8%, reflecting the growth of the payment to customer base of $68,000. So if we look at other movements in the revenue lines. In the broadband market, the drivers of the revenue decline and the shift of test costs, such as Lightbox and Netflix through an agency agreement, whereby they are set up against revenues and also an increase in the [indiscernible] intensity driven by lower market growth as immigration falls in line with border closures. So we expect this trend to continue into the second half. And as Charlie mentioned, we've got a mitigation plan focused on retaining market share which will place some pressure on the broadband revenue line, but it is important to retain as customers for the long-term with our future prospects for our wireless offerings. Cloud security and service management revenues grew by $10 million or 4.6%, with strong growth in our annuity service management business as customers see the value of having a local service provider help them transition to cloud. Our procurement activity remains strong, subject to supply chains, continuing to operate as they are at the moment. And so we expect revenues for the year to be broadly flat, with COVID-related roaming attacks offset by higher spending on mobile devices, cloud and procurement. So as revenues have fallen, we've taken action to manage the cost base accordingly. And operating costs of $1.294 million -- $1.294 billion, sorry, were down $30 million compared to the prior year with target across our programs to help offset the revenue declines and maintain EBITDAI. During the half, we saw product costs fall by $6 million, primarily as the result of lower sport content costs as the cost of record we'll tap on the first half of prior year, with perfect cups will fall at H1 and H2 in FY '21. Also, the divestment of Lightbox have reduced product costs, and we'll continue to see it benefit in H2. Offsetting the lower Sports and Lightbox cost was an increase in procurement costs, in line with the increase in revenues. Labor costs for the first half were down $12 million to $255 million, and there are 3 key drivers of this

Operator: [Operator Instructions] Our first question comes from Sameer Chopra from Bank of America.

Sameer Chopra: I had 2 questions. One is, anything you're noticing in your OpEx and CapEx trends from migrating apps to the cloud or initial 5G rollout? I'm just wondering whether these new technologies are giving you an efficiency benefit that we can expect on a going-forward basis. That's kind of question one. And the second one is, can we just talk a little bit more about this trend of the growth of pay monthly customers away from prepaid? What's kind of driving this trend now, like, during this particular period?

Jolie Hodson: Sameer, I'll take those 2 up. The first 1 around the OpEx, CapEx trends. I think as you see more and more of our services and journeys move online, and we start to use more applications. We look at our own intel infrastructure, we look at what is appropriate to be on cloud. That in itself creates efficiencies. It's a little bit like some of the self-healing in automation we've done around our OTN 2.0, for example. So I think if you look forward, that is an area that we'll continue to see efficiency come through. And I don't see anything that abates that -- really that trend. And then on the second piece around what's happening with our pay monthly, so we have seen a continued trend and growth in pay monthly and that shifts up, in part, from people -- sometimes from prepaid plans up into postpaid or within postpaid, obviously looking for greater data as they do more and more on the move and use their devices more and more. And I think this trend is aligned to that. We did see contraction in the prepaid market, where you see more travelers and so, therefore, the border closures had a bigger impact on that. But even within the prepaid portfolio, we saw our ARPU increase 8.1%. We saw customers seek more of the Endless plan within that prepaid portfolio. So again, that desire to have greater data and use that.

Stefan Knight: And the only thing I'd add to that is that we also -- with our precision marketing, we have been getting better understanding of the household characteristics of our customer base and putting more targeted, more relevant offers in front of them, which helps drive that conversion from prepaid back up into pay monthly, and that's been a real focus for the business over -- actually, for a couple of years now, and we continue to see quite strong success there.

Operator: [Operator Instructions] Our next question is from Arie Dekker from Jarden.

Arie Dekker: Just starting with fixed wireless, first part of the question, just in your broadband connections by segment, the growth in wholesale and other, was that predominantly fixed wireless?

Jolie Hodson: I think that would have been a combination across the different businesses, but we do offer fixed wireless through wholesale as well.

Arie Dekker: Yes. So I guess the question I have is because clearly, you weren't impacted in the 6-month period by sort of holding back on selling fixed wireless like you were in the PCP, and you got a target of 40,000. And so that growth is obviously pretty weak. Now you've talked about the fact that your targeted selling is going well. What is the issue there? Have you tapped out the base of churn growing? And then I guess that's the start, and then what's going to change it for the balance of the year?

Jolie Hodson: I think Arie, it's getting clear around the customers that fixed wireless we expect for and in the areas where we have capacity. Because remembering, of course, with fixed wireless, mobile, it always goes to a particular tower. And the area that you do that. And as we see greater rollout of 5G as well, that also opens up the opportunity. Because predominantly, on 5G, we've seen fixed wireless as the predominant use of that in the first period. So as we look at those things, that are the things -- those are the things that will give us the confidence in the improvement. There is still work to do, there's no doubt. We now have some 9,000 connections to be targeted fully. So we have got a lot of work to do in that second half, and we don't shy away from that. But I think, from our point of view, there has to be enough key things in the first half that meant as we came out of different lockdowns, we had a stop-sale decision period. They, obviously, are now off, so we have an opportunity. And this is a highly competitive market. You can't lose sight of that across the whole urban market in terms of pricing and things that we see out there, so it's really around making sure the compelling benefit as well and the pricing is appropriate for that product.

Arie Dekker: So there was some holdback in selling in first half on capacity constraints in some of those lockdowns?

Jolie Hodson: We still had a lockdown in August and into those periods, we stopped sale because you don't want to have movements happening like that. Also, you have challenges with people changing, we think, through that time, so you would have had a bit of that through here. But I thought, no, certainly don't point to that being the sole reason for why we did it. We need to do -- we need to improve our execution, and we're focused on that.

Arie Dekker: Yes. And you referenced in...

Jolie Hodson: Yes. Sorry, the only other thing I'd say is we're still confident in the addressable market that's there and the 30% to 40% by FY '23. We just need to improve our cadence at how we're moving forward on that.

Arie Dekker: Yes. And you referenced, in the answer to that question, price as well. Are you starting to consider price as well as the 5G improvements as one of the levers you've used look to get to that target that you have for it as well?

Jolie Hodson: I think as we look at the competitive market, you have to make sure that your product sets up both the customer experience and as relative on a pricing basis. So we will always be looking at how competitive offers are across our whole broadband portfolio, fiber, wireless broadband as well. So we will consider that.

Arie Dekker: Yes. Because obviously, in retail, you went back about 10,000 in broadband in the period. So should I take your comment on price to be more around broadband, more broadly than the fact that you're going to use the margin you're getting in fixed wireless to bring pricing down for that product specifically?

Jolie Hodson: Sorry. Yes, I think you should take it as the category as a whole, isn't it, fixed wireless. We will continue to look at it and make sure we consider it as the market.

Stefan Knight: I mean, one of the things that you've seen is with migration. It was much lower. You've got a much smaller amount of activity within the market, yet the same level of competitive activity, so you've got the same number of people creating a small number of customers who are moving. And so that is driving quite a competitive dynamic. And that's why, yes, we need to look at the full suite of offering across both wireless and the fixed in part.

Arie Dekker: Sure. Then I guess just my next question sort of in the future markets, and I guess the sport initiative specifically, can you just sort of -- I guess the objective was to deliver season 1 this year. And I guess, as you start, you haven't had to provide a lot of detail on the financials of it and where you're at with customers. Could you just sort of talk to how you are thinking about season 1 more from a -- is it going in line with your expectations? How are you thinking about growth from here in that category? Are you at the point where you're sort of looking at holding/pulling back? Or are you encouraged enough that as rights come up, you'll be looking to actually participate more aggressively to grow out your content? Just some comments on that.

Stefan Knight: Thanks, Arie. So look, I think it's worth starting just by kind of lifting up, we're going, what are we trying to achieve in the market, and then I'll kind of come through some of your questions. So obviously, we've been pretty clear in the sports space. It does a number of things for us

Arie Dekker: So as the rest in your run rate come up...

Jolie Hodson: Sorry, I was just going to touch on it. To your point around rights, we will speak to them like we have our rights to the [indiscernible] FX the opportunities that have come around to their needs, customer needs, are they commercially sensible for us in another way to grow that offering for our customers. So within that constitute, we will consider that when right fit's come up. And we'll also look at partnerships around with that as well.

Arie Dekker: Sure. And then the last question, clearly, you're not going to have much to provide in terms of detail around that infrastructure assets sort of opportunity that you're looking at. But I guess the question I sort of do have as you sort of look at that is if you release capital from that -- from your infrastructure, what might we expect you to do with it?

Jolie Hodson: I think at this point, we're early on in this review, but what we can see is the opportunity, either to increase our investment or to build order packs should -- to deliver some those strategic full they ask. And so what we think about that is really around how we will invest in terms of creating competitive advantage point faster and using that opportunity to do that through offering a better, more resilient network that customers can get extensively. If you think about what's happening in New Zealand and globally, you think digital service has become more and more in place. And therefore, we think across the country, the need to ensure that we are providing connectivity into -- across the whole country becomes pretty critical. So within this context, we're thinking about the different assets. We're also looking at technology changes that are occurring, so it's more moves to each of a network. Thing about wireless computing and cloud. We think a lot more around what would we also do within our network as a result of that. So this is really the style of looking at the different asset classes, how we best leverage those classes and the economic value that goes with that as part of it. You've seen globally, too, many of our peers. And look, they've already participate in co-investment to get already today, whether that's from a subsea cable or is it from external connectivity growth. So again, us exploring more of those and thinking around how we'd be able to make people benefit from those efforts that we're making here.

Arie Dekker: Yes. So it's not necessarily releasing capital, but also potentially looking at accelerating investment through partnership?

Jolie Hodson: Yes. It could be coming at -- so all of those things will come back with an update on the progress of that at the August -- to give you all the results or just to give you more indication on that, but it's a combination of the things on our menu.

Operator: And the next telephone question is from Kane Hannan from Goldman Sachs.

Kane Hannan : Just 2 from me. Firstly, on the cost-out program, obviously executing on them well in the half. Can you just talk about how we should be thinking about your cost base as some of those COVID headwinds reverse, hopefully, in FY '22? And interested if you could talk about the size of your retail network today, whether you see much scope to drive savings there given that shift online. And then secondly, on the infra review as well. Just talk about how you think your 1,500 mobile towers drive your competitive advantage. I suppose the options that you would have to maximize value, anything that you can say today, whether you'd be willing to just go over 50% in terms of the sale? Just interested given it's in the release.

Stefan Knight: So why don't I pick up with the start at the cost-out one. So in the first half, the cost-out has been driven through ongoing move of our customers to wireless broadband through the ongoing shift of customer interactions from traditional channels through the digital channels and also continuing to really manage our discretionary cost lines very tightly and also starting to see some of the benefits of automation coming through. I think those trends, there's nothing we would see that, that would stop in H2. We would expect those trends, ongoing trends in things that were very active programs, those that are central within our strategy, but we expect those to continue into the second half, so I don't see any of those abating. Again, in the retail space, I think, was one of your other questions. Look, so there's a couple of ways we think of it. First of all, we're always looking at our footprint and our channel mix, so we're clearly seeing a list in the use of digital channels that will create opportunities to think about some of those other channels we have. That's part of our ongoing review that will create future opportunities, no doubt, as well. So I think exit from health retail or from traditional to digital, we'll get the opportunity as we go forward.

Jolie Hodson: The only other comment I'd make here around retailer is we own all of our own network, and that's quite important for us in terms of how our brand shows up in the market and the opportunities that customers have to engage with us on the things that they need to engage with us on. So our online -- sorry, our frontline operating model really leverages both our retail footprint, but also our care centers together and that leverages it that well. So I think from that perspective, you've now seen in Australia, I think there's some consideration of some of the businesses bringing the retail still back in to the business. We have already had that for a number of years, and we see the benefits of that. I think on the broader discussion around infrastructure, we're really not getting into any more detail on the review per se until August, so we don't have anything else to say on that right now.

Kane Hannan : Okay. And maybe just 1 quick follow-up, maybe just on the fixed wireless. So just the 30%, 40% penetration targets. Do you think the scope for all players is to get those sorts of numbers? Or is that -- if you were to hit those numbers, would you think you'd have dominant share in those markets?

Jolie Hodson: Well, I think, to the extent that today, we currently have significant share, competitors have obviously also talked about their ambitions in this space with, I think, similar levels of the ambition if you looked at their desire. I mean what that does leave you, of course, is the 60% to 70% of the market still being [indiscernible] being -- of our space being wireless, so I think that they will have a similar ambition. So you get up and drink, I guess, to it.

Operator: Our next telephone question is from Brian Han from Morningstar.

Brian Han: 6 months ago, Stefan, you guys waived a little on your dividend for the full year. Now you've reiterated the $0.25 dividend. Can't see much change in the free cash flow or the balance sheet dynamics, and it looks like you're even paying the spectrum renewal from free cash flow. So why the sudden confidence about maintaining the dividend of $0.25?

Stefan Knight: I think the confidence is really driven by the improvement we are seeing in the free cash flow. So free cash flow for the first half is up $63 million. We also have a better understanding of COVID-19 impact, so part of the reason for the range previously is we were, early on in the COVID piece, we were at -- there's a lot of uncertainty in the economy. That has played through to a greater extent. Now we have a much better understanding of impacts on the economy, what the lockdown does to our business and the result. We are seeing the free cash flow has improved. So it's a combination of those 3 things has given us the confidence to narrow that guidance range.

Brian Han: Okay. And the network asset review that you touched on, was that brought on by some unsolicited external interest? Or was capital efficiency improvement always on the cards? Because, correct me if I'm wrong, I don't think you mentioned any of this network review in your 3-year plan unveiled last year?

Jolie Hodson: So just to touch on that, we did reference in our Investor Day presentation, consideration of exploration of infrastructure sharing and other types of opportunities that we did talk about that then. So this has more to do with our own internal review and what we're doing rather than any particular off-road discussion with you now.

Operator: [Operator Instructions] Our next telephone question is from Phil Campbell from UBS.

Phil Campbell: Just a couple for me. Stefan, I was just wondering if you could give us a little bit of an update on Southern Cross mix in the wake of COVID and whether that's going to impact -- or have an impact for the tying of the top up payments? And then the second one was just on COVID. Obviously, we've got a $25 million reduction and the impact of COVID from $75 million to $50 million. Is that mainly bad debts? Or are there some other stuff within that $25 million that's causing that?

Stefan Knight: Sure. I will -- so let me start the Southern Cross. So COVID has delayed the time frame of some cost mix, some. So we are -- and we'd note, through the capital calls this year, FY '22 will ultimately depend on the level of presales, and we're keeping a close eye on that. But I think we previously indicated that we might see some resumption of dividends around Southern Cross in '22, that would now push out into '23. So yes, COVID has kind of slowed the time frames on Southern Cross mix. If we then move on to your other question, Phil, around COVID impacts coming down from $75 million to $50 million. So the morning has pretty much played out as we thought. We assumed that the majority would drop away, and it has. I think the other impacts are bad debt. As you say, we'd anticipated that, that might be higher, but government stimulus program has clearly been quite effective there. We also had a high level of uncertainty around just what it would mean for some of our IT services business in particularly some of the project revenues that has proved to be more resilient, which is promising. And lastly, the other one, we uninsured at the time we've risen around some of our handsets, mobile handset devices. And actually, what we've seen, similar to what tech released to the economy is, consumers seem to have quite a strong desire to instead of spending their money on perhaps a holiday, they're spending it on hardware, whiteware, new devices and the like. So we have seen that bounce back a little more quickly than we thought. So I think that gives you a flavor for what those differences are.

Phil Campbell: Yes. Just a quick follow-up on -- obviously, you look at some other international markets, they do talk about this kind of 5G bump. And obviously, it's probably being interrupted a little bit by COVID. But what's your expectations over the next kind of couple of years? Do you think you can get like ARPU growth as a result of 5G and probably further kind of and handset revenue increases as well even at a low margin?

Stefan Knight: Look, I think it's certainly something that we would aspire to. If you look at our a ARPU trends over the last sort of while, we've actually been quite successful in growing our customer base out of prepayment came up. At least what I would do is I would perhaps compare and contrast to some international markets, where they've been in a period of ARPU decline in 5G because they're careless to turn it around back into growth. We've come from probably a low base. We're growing our ARPU, so I think 5G gives us that opportunity to continue that trend.

Jolie Hodson: And obviously, 5G creates the opportunity to consume more over your device, a much faster way to -- data and other things and what they'll achieve will be higher.

Phil Campbell: Could you -- Jolie, can you just remind me, like, I think Vodafone is doing like a $10 increase from July, I think. But I can't remember, is Spark planning on doing that as well for 5G? Or could you give us an update on that?

Stefan Knight: Did you say $10 increase on their pricing?

Phil Campbell: Yes. I think Vodafone was going to put a $10 increase in last July. Obviously, it got postponed. I don't know if it's still going to happen this July, but I couldn't remember if Spark -- what Spark's kind of stated policy on that was?

Jolie Hodson: I think if you look at, as neatly closed out, obviously, until you've got that coverage bit work, you have a proxy access that currently -- but as we look ahead, we would be definitely considering what -- how we think about that from a pricing figure because of the new utility that you see in 5G.

Operator: There are no further questions at this time. I'd like to hand the call back to the speakers for closing remarks. Please continue.

Jolie Hodson: Okay, then. Thank you, everyone.

Operator: Ladies and gentlemen, that does conclude the call for today. Thank you for your participating. You may all disconnect. Have a great day.