Spark Continues to Deliver Steady Performance

Spark New Zealand generates steady cash flow, has a strong position in the New Zealand telecommunications market, and has the infrastructure to offer a diverse range of products. Although competition is intense in the New Zealand market, we believe Spark's scale provides a competitive advantage. Furthermore, private equity ownership of Vodafone New Zealand has heralded in a new age of rational competitive behavior in mobile. Construction of an ultrafast broadband network will lower barriers to entry in fixed-line and broadband, and represents a risk to Spark's broadband business. Successful execution of product bundling that leverages the mobile network could help defend broadband market share, as will continuing growth in fixed wireless broadband.