Spark New Zealand Limited (SPK.AX) Earnings Call Transcript & Summary

[Foreign Language] everyone. Welcome to Spark's Investor Day. If I just start with a few housekeeping items. The bathrooms are located just outside the door by the lifts. And in the case of emergency, staff -- if you make your way out to Albert Street, staff will be able to direct you from there, but I'm sure we'll have no such luck for that today. Okay. Just in terms of today, management will share details of our new strategy for the next 5 years. And since we set our last strategy. We've been seeing a fundamental shift in economic conditions in New Zealand with consumer, business and government spending materially reducing. This has put significant pressure on Spark and demonstrated that some areas of our business are more exposed to cyclical conditions than others. We have undertaken extensive transformation over the last year to respond to these challenges. This included refocusing on our core of connectivity, transforming our cost base and realizing value from noncore assets and our data center business. We have made good progress, but there is still more work for us to do. As part of the transformation focus, the Board undertook a review of our capital management, which was shared with you at FY '25 results, and Stewart will cover again later today. We've also recently renewed the Board with 3 new directors joining us in FY '26. Lindsay Wright joined us in August and Vince Hawksworth and Tarek Robbiati will join us in October. Between them, they bring a broad experience and expertise and governance, executive business management and deep sector knowledge across telecommunications, finance, capital management, infrastructure investment and customer and retail sectors. We have involved two of our new directors in our FY '30 strategy process. And their skills will be valuable addition as we move into this next chapter for Spark. In recognition of my tenure, chair succession remains a focus for the Board. And in the context of the renewal process we have underway, I have confirmed this morning that I will stand for reelection at the upcoming AGM in November with the intention to serve for a period of up to 12 months. My intention in standing for reelection is to ensure a successful transition to a new chair and to support the stability of Spark as it embarks on its new strategy and builds on the progress made so far. The strategy to FY '30 is centered on things that make Spark great, our network, our customer experiences and our people. With capital allocation prioritized to our core business, our aim is to deliver growing returns for our shareholders. And so on behalf of the Board, I'd like to thank investors for your support. I look forward to speaking to you after today's presentations. And I'll hand over to Jolie. Thank you.

Thank you, Justine. [Foreign Language] Welcome, everyone, to the Investor Day. Today is really a chance for us to overview the new strategy in a little bit more detail. At the full year results, we obviously released some of that high-level overview of that strategy. And today, we're going to go into it in the different components, whether that's the network experience, customer experience, what does that deliver? So I'm going to do the first part of the overview. Then we will turn to Greg, who will talk to leading core connectivity, Mark on business connectivity and simplifying beyond the core. You'll then hear from Renee about our better network ambition. Matt will cover our ambitions for customer experience, and we'll finish with our CFO Stewart, who'll speak to our enablers and overall strategy ambitions. We'll then move to Q&A. If you're joining us online, you can ask a question at any time by using the Ask a Question tab at the top of your screen. And we will cover these in the Q&A section at the end of the presentation. Before we look forward, let's first reflect on the last 2 years of our Spark '26 Strategy. When we presented this to you a couple of years ago, we had four ambitions: to be digital and data-driven everywhere, to fuel growth from our digital infrastructure, to become the home of high-tech solutions, and for our business to be innovative, diverse and sustainable. Being digital and data-driven was about delivering better customer experiences to support our leading positions in core markets. Today, we remain market leader in mobile and in broadband, and we exceeded our customer satisfaction target of plus 33 iNPS to plus 41 in FY '25. Our AI investment has enabled us to do more with less, automate manual tasks and we've reduced call center volumes by 20%. Looking at digital infrastructure. We realized $356 million in value from the sale of the remaining stake in Connexa and HTAL during this period. And in total, over the last 3 years, the sale of our passive mobile infrastructure delivered $911 million in proceeds. We've used circa 1/3 of that to invest in 5G stand-alone and our data centers. We now have New Zealand's first 5G stand-alone network. And as you know, we'll soon realize value from our data center assets through the transaction that we have completed with Pacific Equity Partners or will be about to complete, we've certainly agreed. Our retained 25% stake enables long-term value creation as the market grows. The area of strategy most disrupted by the changed economic environment was our ambition to expand into the broader high-tech solutions. With businesses deferring technology investments, this is certainly not viable in the near term. There are, however, areas of opportunity related to our core connectivity, including through IoT and 5G stand-alone that we have invested. As we shared at our full year update, we are also seeking investment partners for our MATTR business. Finally, we continue to invest in our culture and social license to operate. Spark's maturing sustainability performance saw us included in the Dow Jones Best-In-Class Index. We have continued to reduce our median gender pay gap. And while overall people engagement has been impacted by the recent transformation, we've seen solid progress on broader measures. While progress was made against these strategic priorities, we recognize earnings performance and shareholder returns have been impacted as the economic environment in New Zealand changed and we needed to adapt our business to respond. ROIC reduced to 8.7%, but does continue to outperform the majority of our global peers. Ultimately, this changing environment is why we've had to reset the strategy a year early. So what's changed since our last strategy? As I just outlined, the economic environment for New Zealand has changed and net migration has reduced. We have seen significantly lower spending in business and government, high levels of price competition. And as I touched on earlier, this impact was magnified for Spark given our scale in the IT business. We've also seen a fundamental shift in AI's capabilities over this time. We've been using AI within Spark for many years, but with the much broader uptake of generative AI, this has opened up new opportunities to do things differently and we're just at the start of that next evolution. We haven't sat still as those changes happened around us. As you know, we implemented a significant transformation program in FY '25 to refocus on our core with a refreshed mobile positioning, increased brand investment, ongoing investment in our 5G rollout and securing a U.S.-based satellite provider, which will launch in the second half of FY '26. We've also transformed our operating model to be simpler and leaner with a material reduction of 1,300 roles across the business in FY '25. This supported our labor and OpEx cost reduction of $85 million in the second half of '25. Our new global partnerships will accelerate our use of AI by providing access to global best practice and improving efficiency. We completed our noncore asset review, and a series of divestments to reduce debt and recycle capital to the core. So looking forward to the next 5 years, we know that connectivity will only become more crucial to our customers' lives. Data usage on our mobile network has averaged around 14% growth per annum over the last 3 years. Connectivity and data growth also drives up demand for cost-effective cloud and data center solutions. And as I just mentioned, rapid AI advancements alongside our global partnerships will enable us to bring and do things differently, not only within our own business but for our customers as well. And in the near term, we expect economic conditions to be subdued. But we're hopeful of improvement as we continue to see quantitative easing and incentives for businesses to invest. And finally, as has always been the case, we continue to operate in a competitive environment that's constantly changing. This makes our adaptability as a business and the scalability of our cost base critical to our success. It's also important to remember that we are building on strong foundations. It can be overlooked at times and performance has been more challenged. We have leading positions in our markets, in our network quality and in our brand strength. We have privileged positions in the highest value mobile segments with high levels of customer loyalty. Our customer experience score has grown every year for the last 5 years to an all-time high. We have a significant customer base across consumer, SME, enterprise and government and a highly valuable asset base that reaches almost all New Zealanders. We also have the highest value spectrum holdings of 350 megahertz. And yesterday, we announced a long-term partnership with Tu Atea, the Maori spectrum and telecommunications service, to secure exclusive rights to use 20 megahertz of C-band spectrum for a period of 18 years. And this enables Spark to deploy 100 megahertz of C-band spectrum and we expect 5G speeds to increase by up to 25%, and that will be able to support up to 20% more traffic on our 5G network as a result. Finally, our return on investment continues to outperform our global peers. The focus of our new strategy is to strengthen and grow this position. This brings me to our FY '30 strategy. Our purpose on the left is enduring. We see ourselves as an enabling business that is here to help all of New Zealand win big in a digital world. Our ambition for the next 5 years is it's better with Spark, underpinned by a better network and better customer experiences. We've made two clear strategic choices that we will lead in core connectivity and simplify and optimize beyond that core. And finally, our strategy is enabled by four key areas: people and culture, technology and AI, financial discipline and sustainability. So what do we mean it's better with Spark? Whether it's our network performance, whether it's our customer experiences or the workplace culture that we create for our people, we want it to be better with Spark, better than our competitors, but also better than we are now, continually improving the things that matter most, and that's our ambition for the next 5 years. So when we undertook the strategy refresh, we started with a simple and yet fundamental question, why Spark? Why do our customers choose us? What do they choose to pay a premium to some of our products and services. And we know from the research we undertook with over 4,000 New Zealanders that network is king within those choices. The four top reasons for someone choosing a mobile provider are network related. Reliability is number one, then coverage, safety and security and speed. Value comes next. It's about good value for money, simple and easy pricing and discounts for bundling multiple products with us. And then comes customer service, being able to solve problems, reward customer loyalty and provide products and services that are easy to understand. So with the understanding that we must always be price competitive in the markets that -- and offer the right value exchange, this confirmed our strategic focus on network and customer experience ahead. We then decided where and how we will compete to win. As we've shared, capital investment will be prioritized behind core connectivity, which covers mobile, broadband, IT, business connectivity, managed data networks, collaboration and voice. Core connectivity contributes about 80% of our margin, and we have clear leadership positions in all of those markets. Our customers like to bundle connectivity products together, meaning they reinforce each other. And we have positive tailwinds for growth such as demand for data and new solutions coming off the back of investment in 5G stand-alone. When we look beyond the core to cloud, IT services, and procurement, our focus will be on simplifying and optimizing these businesses. While we have leading positions and when we compare ourselves to global peers with similar scale IT businesses, we can say we are more profitable. That aside, we operate a more fragmented, competitive environment in these segments where changing mix and demand is impacting profitability. This requires a different approach to our focus on the core, which we'll talk through later today. Before we go further into the detail, I wanted to touch on data centers and how this sits within the broader strategy. Our data centers remain a core connectivity asset. But as you'll be aware, we recently announced the sale of a 75% stake to -- of our data center business to PEP. This secures a funding pathway for our development pipeline and values the business at up to $705 million, representing an FY '25 pro forma EBITDA multiple of 30.8x, which compares favorably to similar transactions in the marketplace. Importantly, it enables Spark to realize value for our data center assets in the short term while also continuing to participate in the growing market through our 25% retained stake, creating further value for our shareholders over the long term. We'll use the proceeds to reduce group net debt, and this will also enable us to focus our capital investment behind our core connectivity business. DC Co will be established as a stand-alone entity with its own Board, management team and financing facilities which are nonrecourse to Spark. This means our future annual capital contribution is expected to be modest. DC Co already has a leading position in the market with 11 facilities across New Zealand, around 270 customers and 30% of its revenue attributable to hyperscalers. The 130 megawatt development pipeline is spread across three strategic Auckland locations at Takanini, the CBD and the North Shore. Land, resource consents, fiber and power have been secured to progress the first stages of these builds and to take advantage of the attractive market dynamics here in New Zealand. The growth opportunity ahead for DC Co is significant. So when you combine demand from enterprise and government, traditional cloud growth and demand from AI, we expect forecasted demand to grow around 8x over the next 10 years. And our DC Co business is well positioned to secure its share of that growth. So to summarize the new strategy, in an increasingly digital world, our products and solutions are only becoming more important. Customer data use continues to increase every year. Data center capacity demand is growing. Digital transformation remains critical to both public and private sectors. Connectivity is our core business and our absolute focus in the years ahead. When New Zealanders trust us to keep them connected, we want it to be better with Spark whether that's our -- through our experience on the network or whether that's helping them to resolve issues or simple customer experiences. With this focus on our core and the things that matter most to our customers, we approach these next 5 years with clarity and determination to deliver stable returns for our shareholders and growing dividends over time. With that, now I'm going to hand over to Greg Clark, who will talk to you about our core connectivity business.

Thank you, Jolie. Good afternoon to those in the room and also online. I'm Greg Clark. I am the Consumer and SME Director for customer side of our business. And I'm here today to talk to you about core connectivity with a particular focus on the consumer and SME segment from mobile through broadband. So as you know, the crown jewel is mobile. Mobile accounts for 40% of our revenue and 52% of our gross margin. We have #1 market share by mobile service revenue and over 2.6 million customers. In consumer, we have a unique multi-brand positioning with Spark and Skinny, enabling us to compete at the value and premium segments of the market. And in consumer, our consumer and SME segment accounts for over 85% of our mobile service revenue. And enterprise and government, the market dynamics are different, which my colleague, Mark, will speak to soon, but -- in that part of the business, we have around 50% market share, a clear leadership position. And through our wholesale business, we continue to participate in the small but growing MVNO or mobile virtual network operator market. We have a new MVNO platform launching early in 2026 that will enhance our competitiveness within this segment further. So this is a really strong position for us to build from, but we know that we can't be complacent. As we look ahead, we know that there will continue to be positive tailwinds that support growth, growing customer demand for data. As Jolie mentioned, the data usage is increasing 14% year-on-year and population growth, a key driver of connection growth in mature markets, while we see that, that is impacted by lower migration in the near term, we do expect to see that improving over the strategy period. When we break our customer base down by type and tenure, what we can see is that we have our strongest market share in the most valuable segments. By that, I mean the segments where customers spend more and are more loyal versus those customers that spend less and tend to switch between brands more frequently. So that means our strategy must be cornered on nurturing and defending these high-value customers. Overall, we expect customer mobile service revenue growth to be driven by modest population growth, along with value growth from price increases supportive with new product innovation and clear value exchange with our customers around those price changes. And in enterprise and government, where performance has been more challenged than recent times, connections have stabilized, following workforce reductions across the economy, and we expect base growth to return in line with improved economic conditions. We do, however, continue to expect ARPU pressure in the near term from competitive pricing activity that's been prevalent in enterprise and government within FY '25. So we have four key focus areas through to FY '30. Firstly, it's about providing more choice to our customers and continuing to participate across all four segments of the market from pay monthly to prepaid, business and MVNO. Both our Spark and Skinny brands continue to resonate really well with customers being highly trusted so we know that they have a clear and distinct role for us to play in the market and how we compete. And in business mobile, we can invest in mobile propositions that would differentiate Spark on more than just price. For example, network slicing, data prioritization and converged offerings along with mobile device management. Then we will reward and recognize our high-value and loyal customers to support retention and encourage trade-up into higher-value segments based on the way that we set up the pricing architecture within our lineup. As I said before, loyalty is our strength. From our analysis, around 40% of our customers are in premium segments, which contribute over 70% of our revenue. This isn't about introducing a complex loyalty scheme, but it's more about recognizing loyalty, rewarding and recognizing customers in meaningful ways, whether that be priority access to new products and services, advanced tickets to Spark Arena events or exclusive deals on hero devices for high-value customers. We have developed strong marketing automation capability over recent years that will support us in targeting customers with personalized offers that are relevant to them in an efficient way to help bring reward and recognition to life in meaningful ways. Next, we want to provide a clearer link between our network investment and our customer experiences so that we can provide better network usage experiences when it matters most to our customers. This might include communicating specific network changes that have happened for customers in area such as 5G going live or if there's been a network issue that customers have raised. Once we've solved that, we'll loop back and communicate that to our customers. We will focus features that provide our customers additional value and choice as they move through pricing tiers. And this is even more important when you consider that device replacement cycles are slowing as innovation leaps between those devices are slower. So having innovation within our own category becomes really important in terms of keeping engagement up with the category and our customers engaged. A good recent example of this is our launch of kids account that we did in partnership with the Parenting Place, which is about introducing or helping parents introduce kids into the mobile world with a few additional safety controls to get them started. Within the SME segment, we'll continue to focus on growing our mobile base by driving a narrow range of IT services and penetration across that base. So what we know in that market is that SME customers that hold core connectivity services and IT services with us are 50% less likely to change providers. So that's a powerful insight for us and illustrates clear opportunity. So what we'll do there is with a narrow range of IT services from IT partners, we will work with our Spark business hubs to target customers with a broader range -- sorry, to grow the density of our IT services across our core connectivity base. For example, this could be a Cisco Webex collaboration solution or it could be Microsoft Office 365 licensing bundled with mobile, which is something we're currently piloting. Our Spark business hubs differentiate Spark in the market within the SME segment. We are the only telco with that channel in the market. It provides a point of differentiation, and it is our consistently highest customer satisfaction performing channel. So we're in a strong position with this segment. It's something that resonates particularly well with our customers. So we're in a unique market position bolstered by our business hubs and integrated IT services, providing us with a competitive edge. Switching focus now to broadband. This is a tougher market than mobile. It is much more fragmented and competitive. However, Spark continues to have a leading position by some distance. We have over 660,000 broadband customers across our Spark and Skinny brands, and our wireless broadband proposition now makes up 32% of our base. We see continuous -- our customers continue to value the convenience of wireless broadband, which can be unboxed, plugged in and operational within minutes or even transported from one location to another, such as from the family home to the batch. And as our 5G rollout matures, the performance of wireless broadband is only going to improve. While 4G wireless broadband offers average speeds of around 63 megabits per second today, that increases to around 336 megabits per second competing with entry-level fiber products. So looking ahead to FY '30, we know this is a mature and commoditized market, meaning growth will most likely follow migration and housing development, and how we compete in that kind of market is really important. We want to maintain market leadership, but we need to balance connection share with maintaining overall value. This makes wireless broadband growth important given the benefits it brings alongside the appeal to our customer base. It's a much more attractive margin proposition for Spark. We've reached 50% population coverage for 5G to date, and we expect to complete the rollout by within the strategy period, which will open up more capacity and higher speeds to the market. We also know we have an opportunity to improve our focus on bundling to support both broadband and mobile retention. Around 50% of Spark households today have mobile and broadband together, which obviously presents the opportunity of the 50% that don't. There is experience value for customers here. We have an outage assist solution that keeps customers via mobile connected in the instance of any fixed line outage when they have mobile and broadband together with us. And we know that broadband can play an important role in the most prioritized mobile segment, pay monthly, and reducing churn or creating tenure. Our pay monthly customers with broadband has superior retention compared to mobile-only customers with up to 12 percentage points of annualized churn benefit. This makes our focus in broadband very clear, using product innovation and compelling offers across our customer base and through our sales channels to increase bundling and therefore, retention in the years ahead while continuing to grow wireless broadband as our 5G rollout matures. We've also chosen to invest more in our brand and marketing to help drive growth in core connectivity services in a more competitive market. I'll now hand over to Mark, who will talk you through business connectivity.

Thanks, Greg. Good afternoon, everyone. My name is Mark Beder. I'm the Customer Director for Business. We're now going to switch our focus from consumer market to business. Business connectivity includes not just mobile, but managed data and networks, IoT, which is Internet of Things, collaboration and voice. And within this mix, we've got modern products that are in growth like IoT and collaboration. We have sort of more mature products like managed data and networks that are moving from legacy formats to more modern formats and alternatives. And then we have legacy voice, and as we know, that's in long-term decline. But there are also product lines within it like 0800 that we are seeing grow. And we went through the strategy process. It was really clear to us that these core products were leveraging our core infrastructure and support mobile retention. So they were core to our business. And Spark has a really strong position here. So 80% of our enterprise and government customer base, which spans over 1,100 customers, purchased connectivity products and services from us. We also have over 110,000 SME customers that purchase mobile broadband, collaboration, managed data, IoT and IT services. And we're investing in newer connectivity assets that these customers are enabling, things like 5G stand-alone network, our IoT networks that have now over 2.3 million connections. So we look forward to FY '30, we know business connectivity will continue to be core foundation layer for our customers. Connectivity solutions will continue to modernize. Customers will continue to want to purchase multiple connectivity products from one provider. And what we mean by that is they might purchase fixed and collaboration or fixed and mobile. So our focus areas are, firstly, proactively transitioning customers from those legacy products like traditional voice, wide area networks and on-prem and collaboration solutions to modernized voice of these products, sort of like software-defined networks in collaboration or voice in the cloud. Second, leveraging AI and automation to improve the efficiency of how we deliver these services. For example, using digital service offerings to deliver better experience at a better cost. We know customers like self-service options and that they're simpler and easier to use. And so we're upgrading our B2B portals to help customers use and be better experiences for our customers. And also, we're leveraging global partnerships so that we can go faster in the space. And finally, as we look forward, advanced connectivity solutions that leverage the network investments and making things like 5G stand-alone and Network-as-a-Service, which Renee will talk to, also will come into play. And as an example, things like 5G private networks, we're starting to trial those with customers, and Renee will talk more about that as well. So I'll shift track now and start talking about things beyond the core. And when we talk about things beyond the core, we're talking about cloud, IT services and procurement. In cloud, we talk about private, public, hybrid cloud solutions. Private cloud is Infrastructure-as-a-Service and the managed services that we wrap around it, things like backup as a service and storage. Public cloud is where we use AWS or Amazon or Microsoft in those spaces. And hybrid cloud is how we toggle between the two. So for instance, moving from private to public. And this is the area that we've seen the most structural movement. So obviously, as customers move from on-prem to private solutions or from private solutions to public solutions. IT services includes a number of different things, such as modern workplace, which is where we provide things like desktop as a service. So for example, we would be providing a company with their laptops, their software and providing ongoing support and upgrades. Service management is where we provide IT service desk and the application, which is more like us acting as an IT department. And also, we've got our consulting division, which is things where we provide IT consulting services, or more recently, data and AI. And IT services is where we've seen the most deferred investment and more cyclical impact from the recession. And procurement is obviously the resell of our hardware and software licenses, which have high revenue but low margin. And as Jolie talked about earlier, these are good businesses. When we put them against global peers during the strategy work that we've done, we could see that they have more scale and profitability. But also, as I said, that we've seen structural and cyclical shifts in these markets, and this has impacted both revenue and profitability. And these businesses have different drivers and investment profiles than our core of connectivity, and we need to think about them very differently than we do our core business. So our focus in this segment is firstly, to simplify portfolios by sunsetting and exiting legacy offerings, so we can focus our efforts on the areas that we can grow and we believe we can win. For example, in IT services, this is about migrating customers from older and more bespoke legacy services to our new ServiceFlex platform, which is automated and more efficient and effective for customers. And when we reset our operating model this year, we also established a dedicated team within Spark that focuses solely on legacy transitions. This gives us absolute focus and will accelerate the path on how we can achieve this. We also focus on improving our digital services channels using AI and automation, which we know will make it easier for our customers and improves efficiency by automating tasks that we currently have in manual state. Our new global partnerships will also play an important role in optimizing these businesses. In cloud, for example, our partnerships with HPE lowers our private cloud infrastructure costs by moving from a more fixed to a variable model. Our partnership with Microsoft improves our margins on public cloud and our ability to retain and lead our share in the marketplace as well. And then we've also been able to move from private to public cloud in our internal stack, which give us some cost savings. And within IT services, we'll be able to highly target the product variations we provide, specifically in modern workplace. And we'll migrate customers from legacy bespoke solutions to our ServiceFlex management platform, which is more automated and more efficient for us to deliver. And we know that data and AI is a growing space for us, and we'll continue to maintain to do that. We've also rightsized and consolidated our operating model over the period of FY '25, as Jolie talked through, and that included bringing our subsidiary business into Spark, which -- into a standard service line model, which gives us the ability to adapt more quickly into changing demand or economic conditions. So in summary, for cloud IT services and procurement, our focus is digitization, simplification and improving margins as these categories continue to change. So lastly, I'll just touch on our strategic asset base and how we're thinking about this ahead. We have a significant domestic asset base, which we consider core. This ranges from our highly valued spectrum holdings to our active mobile assets, IoT networks and fiber routes, which include shared fiber and the fiber that we own directly; Entelar Group, which obviously delivers both mobile and also our fiber delivery; and as Jolie talked about, our data center shareholding. These assets provide competitive advantage and network resilience, and we'll continue to retain them and invest in them. We then have our international connectivity assets and our shareholding in subsea cable businesses, Southern Cross and Tasman Global Access and our own purpose-built satellite station in Warkworth. These are valuable extensions to our network that provide us with owners' economics on high-growth routes. While they are valuable, we consider them noncore and we'll continue to consider the right level of ownership over time. Lastly, we have our digital connectivity assets that sit outside the core, MATTR, which operates in digital trust and our private cloud infrastructure. And as Jolie has already shared, we have already commenced the process to introduce new investors into the MATTR business. So with that, I'll hand over to Renee to talk about our network ambitions.

[Foreign Language] Good afternoon, everyone. My name is Renee Mateparae. I am Spark's Network and Operations Director. The better network ambition within our strategy underpins our success across all markets we operate in. And this is not just about winning awards so that we can talk about the fact we have a better network. This is about creating a network that is reliable, trusted and advanced. It's about creating a network that delivers more for our customers when they need it most. When we talk about reliable and trusted, this is about investing where it matters for our customers. So this means that every dollar we invest in our networks is targeted to deliver better real-world network experiences for those customers in the areas that matter, so a reliable network connection, good coverage and a safe and secure connection. It's about proactively resolving network issues. So moving to a world where we can detect and resolve network issues proactively and leverage our partnership with Nokia to accelerate our network automation through the use of AI, advanced analytics and smart automation. And it's about uplifting our regional resilience. This means targeted investments in our mobile fixed and transport networks and satellite connectivity that Jolie mentioned earlier to improve redundancy and coverage across Aotearoa. Now when we talk about new value from advanced technologies, this is about the creation of new commercialization opportunities for us at Spark. It means new customer solutions. With New Zealand's first 5G stand-alone network, we will be bringing new capabilities to our customers, such as network slicing and private networks. As I said, satellite is also underway and will be in place for our customers in the next year. We'll also be looking at new commercial models. And as our announcement this morning about our partnership with Aduna suggests, we will be participating in the global shift to create new commercial models for Network-as-a-Service that are API-based and globally standardized. So I'll talk a little bit more now about each of these areas. So firstly, customer-focused connectivity. When we talk about a network being reliable, this is about getting the connection and the performance that you need when you need it. We see AI and automation playing a big role in this as we move forward. And we've been investing in automation for a number of years. Our new partnership with Nokia will see us accelerate our capability in this area. Our ambition is to proactively detect and resolve issues in real time, often before customers will even know that there's a problem. A great example of this that's in our network today is our recently upgraded optical transport network that we call OTN 2. This is a self-healing network that can detect when there's a fiber cut on our main transport routes. It can automatically then reroute the traffic onto an alternative fiber. And this means that we can migrate services seamlessly to the new path with little to no customer impact. We'll be doubling down on this type of self-healing and looking for opportunities to apply similar technologies to our other networks and to our operation centers. Resilience is a broader concept for us at Spark, and it includes investments that we're making in regional infrastructure to build greater redundancy across the country. It's really about making sure that we can get back up and running faster when we know that things inevitably do go wrong. So whether that's a severe weather event or it's a farmer accidentally digging up a fiber, we're investing to make sure we improve regional coverage. So that means more sites in regional locations. We've been investing in our access and aggregation network, which connects all of our mobile cell sites back to our core network. This investment provides additional redundancy across the network. It means that we can get those services back online faster for our customers. And the idea of safe and secure is about protecting our customers, making sure that customers have a secure connection through protections like proactive threat detection and network security. Another great example of this network-based threat detection is our SMS firewall. So this firewall uses a global database of URLs, phrases and calls to action that are typically found in text scams. Since we implemented the SMS firewall, we've blocked over 1 million texts from our customers, so meaning that those customers are better protected. Moving on now to advanced technology and what we're looking at in this space. So we are the first New Zealand telco with a 5G stand-alone network. What that means is we have a 5G core network as well as a 5G radio network. And we are migrating traffic across to this new core network today. We're in the process of productizing the new core and the capabilities that, that will offer. A 5G stand-alone network enables a greater level of customization and also ultra-reliability for customers. And to bring this to life, this isn't just theoretical. As Mark referred to earlier, we have live examples that are with customers today. So this year, we were the first telco to launch a private 5G network for a business customer with Air New Zealand. So here, we're using a private 5G network in Air New Zealand's warehouses to help carry out the laborious task of stock taking. So if you think a warehouse environment, you've got very high shelves and obstructions, which means that WiFi isn't reliable enough. We worked with our partners to have a drone that was tethered to a robot, scanning those high shelves, taking photos of the stock, and that could be anything from aircraft parts to headphones and blankets. These stock takes would traditionally happen twice a year. They're very labor-intensive, and they also took staff away from their core roles. The feedback that we've had is that the solution increased productivity, provide real-time stock taking and also enhanced safety because people didn't have to scale the high shelves to be able to count the stock. We are working with other business customers at the moment to install tailored solutions that run on 5G networks. And so expect some announcements soon, particularly in large warehouse environments and places like ports. What this means is it opens a whole set of new commercialization opportunities. As I mentioned, our partnership with Aduna that was announced earlier today means that we're able to take the opportunity to commercialize things like Network-as-a-Service and network APIs. So looking at Aduna in particular, we see great opportunity in being able to commercialize this partnership that was announced earlier today. So Aduna is a joint venture between global telecom operators and Ericsson. It enables businesses and developers to directly access and customize telecommunication networks using globally standardized network APIs. And API is an application programming interface. So it is a little bit like a bridge that allows different software applications to talk to each other and in future, to talk to elements of our network that we will provide access to via these new network APIs. So if you imagine, if you have a remote control for your TV, the remote control is like an API. It lets you interact with the TV without you needing to know how the TV works internally. You just push the buttons to change the channel or adjust the volume. And this means that businesses and developers will be able to directly access and customize networks using these APIs. We see this accelerating innovation and reducing time to market for new digital services. For Spark, what this means is we can explore also new commercial models that go alongside this to monetize our significant network investment and particularly our focus around core connectivity. Means we can find new ways to capture value from the capabilities that we're introducing into our network. One of the first API solutions that we are looking to develop with Aduna is around fraud protection. So SIM swap fraud occurs when a mobile number is transferred to a new SIM card without the account holders' consent. By providing a time stamp indicating when the SIM card was -- when the SIM card that was associated with that phone number was last changed, this API will allow businesses to identify where there's been a recent SIM swap, and that might suggest unauthorized access into that account. It enables the businesses to then act to do things such as blocking transactions that can ultimately protect the end user. We see the API economy is forecast to grow by USD 6.7 billion by 2028 worldwide. By unlocking network services like this, it's an exciting area for Spark to explore over the next 5 years. I will now hand over to Matt, who will share a bit more about our better customer experiences.

Thank you, Renee. Hi, everyone. I'm Matt Bain, I'm responsible for brand and marketing, CX and data automation here at Spark. So let's start with our customers. As you've heard, customers is really at the heart of the strategy and the experiences they have decide whether they stay with us or not and how much they spend with us. So that's driven a lot of what you're hearing today. Thankfully, our interaction NPS, which is our key metric for customer satisfaction, has been rising over the last 5 years. It's more than doubled from 19 to 41. And that's been a methodical process of understanding where customers are not satisfied, prioritizing pain points and fixing those as we go, in particular, using digital channels where we can because of the efficiency they deliver. That leaves our teams to handle the more complex interactions, which they have more time for. And so this is a process -- and we acknowledge that there's no finish line here, right? This is a constant process, we need to keep evolving in this area. Now every interaction with our customers is an opportunity for us to build our reputation, build our brand and bring to life our better with Spark ambition. So we need them to know that we're there for them when it matters. And there's three key areas for us. So the first is how do we make sure that our baseline experience is consistent and reliable, that starts with our network but permeates up through every touch point in our business. Secondly, how are we bringing both our network, our product and CX features to market quickly so then as we go, we can ratchet up that experience level over time more quickly. And then how do we make sure that when and if things do go bump in the night, that we're there to support them quickly and even proactively. Now being simple and easy to deal with for us means, as I said, getting the basics right, that's something we do now. It's not about fixing everything all at once. We are very clear on what are the parts of the customer experience that will have the biggest impact if we fix them and therefore, let's prioritize those for investment and have a plan that does that over the next 5 years. Increasingly, it will mean preempting critical service issues before they happen. Now Greg mentioned outage assist, that's the capability we already have in our business. This means that if you have fiber broadband with us, and it goes out, we proactively contact you and say we see your fiber is out, here's some free data on us through your mobile plan. And we've had huge positive satisfaction coming back from these types of activities. So in the last year alone, there's 450,000 customers that use that service, and it cut about 150,000 calls out of the call center. So this is improving the service that our customers are getting, but also reducing our cost as a business. You heard a little bit about reward and recognition. Now as we did the research with our base to drive the strategy forward, what came out really clearly is in our industry, reward and recognition is something that is not done well by anyone yet. And therefore, this has become a big focus. Our acquisition engine is working pretty well. So the focus turns to how do we use the capabilities we've got and we'll come on to those to really make sure that our most valued customers feel their value. If we move on to the various channels. So stores and call centers still are incredibly important. People talk a lot about digital, but 92% of our postpaid acquisition still comes through our physical retail and call center channels. So continuing to find ways to evolve the experience in those channels is really important as we go forward. Today, we launched a new feature for authentication. So traditionally, in a business like ours, you have to prove who you are with a passport or driver's license. That's inconvenient. People don't carry those around all the time. As of today, in a Spark store, you can authenticate through the app. And that's taking minutes off of the experience and making sure that customers don't walk out the door because they can't actually authenticate themselves. In the future, we're looking at how all those kinds of technologies change the way that stores operate. So moving from fixed till systems to mobile devices to serve customers, so you serve them where they are and you free up retail space for other activity. When we spoke about interaction NPS, that satisfaction measure, that was overall. What we see is we are at a very high level in our retail environment, but we've got work to do in our digital channel. So our two biggest digital channels are our app, if you're an existing customer. So that is the dominant channel if you're a customer for a business like us. We've got opportunities there to ratchet that up. We're at the moment looking at how do we refresh that experience and what's the critical journeys we need to do better to make sure that our existing customers can find what they need, change their plans, upgrade, we can cross-sell to them. The great thing about that is when you're on our app, there's a huge opportunity to reward you, recognize you or send you an offer, right? We're quite good at sending offers that we're going to do more on the recognizing you're a great customer. Thank you very much. On the acquisition side, the website, again, same thing. That's the single biggest channel for people who are going to come and buy from us because most people who go into a store have been to a website first and website conversion rates and direct sales, we expect to increase over time. So that's the second focus for digital is making sure that we have a structured plan to improve the experience our customers have in our website over time. Now like in every meeting like this, you probably hear a lot about AI. Everyone's talking about it. This is underlying our omnichannel strategy today. We have spoken to some of you, the last time I was on stage a few years ago about the capabilities we've built we now call Kapello. This is quite an advanced platform with hundreds of machine learning models that can target individual customers and households and deliver next best action through each of the channel they're in. So we have got some great capability here. We also, since then, have rolled out a lot of AI into places like call centers, right? So one of the big time sucks in the call center is agents having to write call summaries for every single call, right? So they're doing that while you're talking to them and they have to have it done at the end of the call by taking a couple of minutes. And if they pass the call to someone else, that data goes to make sure that the next person picking up the call inside our call center knows about that interaction. Because it's not much fun, only about 20% of it gets done typically in the call center, right? So we now have that done autonomously with LLMs that have been trained to do that. It's now 97% of all the calls have real-time call summaries created so they're there afterwards, and they were 99% accurate now, too. So that kind of capability that takes minutes out of call time and also make sure that when the calls are transferred, it's a seamless process. We're now looking to how do we take AI agents directly to our customers. It's got to be done with caution. Things like AI agents authenticating a customer before they're passed on to a human are the sorts of task we'll look at first because again, it takes minutes out, make sure that it's a repetitive task that can be done reliably by machine. And again, this is about making the customer experience better, but also making sure that our people's time is used more effectively. Now, we're not just using AI in our retail environment, and our marketing. We now have it quite broadly applied through the business at scale. So in network, as you heard, it's supporting better network experiences, we're more quickly identifying problems and resolving them. Our frontline teams have AI assistants that actually they use internally, which answers questions for them about our business, which has taken about 60% of queries to back office teams from front lines out of the workplace as well. Marketing, we've spoken about. In sales, we've got AI supporting our enterprise and government sales teams. And our SME segment, which Greg heads, has a SME conference and they give prizes for the best salespeople, the best salespeople now are the people who are using the predictive tools to identify the next best action for any given customer. So we're seeing that on the ground at scale, the stuff is working for us. One for the analysts in the room, one final one just to talk about how we're doing it internally in our business. So most of our business owners have -- are quite analytical and they like to understand what's happening in the business and they have a lot of questions which they ask a finance person who may not be able to code SQL. So an analyst will then do an SQL query to a database to download the raw data, which is then put into a spreadsheet and some commentaries done. We've now got text to SQL LLMs working across our critical data. So in seconds, you can get the answer to a business question, it will give you a multimodal report with the raw data tabulated and then an explanation of what it thinks it's doing -- is going on. And if you have a follow-up question, immediate answer. So these are the kinds of things we already have operating, and it gives us a great platform as we move forward. One of the things we're now looking to, and I think this is more broadly leading businesses and AI are looking at is how do we move from point solutions to point solutions. So here's a task I do, wouldn't it be great to automate that? How do we take a whole process and automate that? So that's combining robotic process automation, LLMs and machine learning models together to make sure that we can take whole chunks of time consuming workout to bring experiences to our customers more quickly. A recent example of that is some work we've done with Webex. So Webex is a solution we sell to our customers wherein you call them up, it will give you options of who you want to talk to, and it will call route you basically inside the business. They can be quite complex, right? So if you're a salesperson, you're selling that first meeting with a client, what do you need, that will result in some requirements gathering and some call flow process mapping, which will result in a pricing structure, which will result in a contract. We can now do that not in weeks, but in an hour. So we now have an iPad app where our salespeople go to our client, requirements are captured, call flows are autonomously created in real time and priced, and then through our sales force integration, contracts are created. So these are the sorts of opportunities we see in the next few years as being able to make a big difference to the way we operate. So you can tell we're excited about it. With the acceleration of AI, we're well placed. We're not at the starting line. We've got some runs on the board already. We're planning to do implementation at scale. The partners we mentioned, Salesforce, Snowflake, Microsoft, Adobe, these guys are also running hard at it, and we've chosen them because we don't want to build our own anymore. We want to be on the back of these large global leaders who are investing a huge amount in making sure that AI is available in their platforms. So this is going to enable us to -- it's going to underpin the way that we provide better experiences for our customers going forward, and we deliver at pace. So this also enables some of the productivity savings we're looking for, which Stewart is going to now come up and talk to you about. So I'll hand over to him to talk about our enablers and financial ambition.

Hi there, I'm Stewart Taylor. I'm -- for those I haven't met, I'm Spark's Chief Financial Officer. So welcome here this afternoon. I've got a few things to talk through. I want to talk about our enablers, I want to talk about our -- I'm going to go cover our capital management reset briefly, and I'm going to talk to our financial and nonfinancial ambitions as well. So every strategy needs execution and to do execution properly, you clearly need enablers. So we've thought carefully about what we consider are the full key enablers for our strategy to be. Now the first of these is people and culture and over the past few years, we've had to make some really tough calls to reshape our workforce to adapt both to the changes in the economic environment and also the changes to the competitive environment in the market that we work in as well, but this hasn't at all diminished our commitment to having people at the heart of Spark's success. So our goal there is to create a culture that's focused on customers, it's focused on performance, and continuing to win in market. Now we see this as a win-win. It will create rewarding career paths for our people, and it also will deliver results for our shareholders as well. Now to do this, we'll need to lift -- we clearly need to lift engagement and this means investing in learning and development, building relevant capabilities like the use of AI that Matt just spoke to and that are really connected with our strategy. And we're also investing and having an ongoing focus on things like health, safety and well-being as well. Now the second pillar or the second enabler here is our technology and AI strategy. So as a telco more so than anything where we use technology to underpin our products and services. So the combination of technology alongside our people, is absolutely critical for our ability to compete in the market. So our technology strategy needs to be clear and it's got to focus in three key areas. The first of these is data. So high-quality data at scale is required to deliver broad automation through things like AI that Matt just talked about. And at Spark, what we have done is we've invested in the migration of data to our scalable cloud environment and improving data quality, so it is AI-ready. The second pillar here is AI-enabled platform. So going forward, we're investing in partnerships with globally leading platforms like ServiceNow, Salesforce and Adobe to benefit from the huge investment that they can make in AI on their platforms and then our ability to leverage this. And third here is scale delivery partners. So we've established a partnership with Infosys is the best example where we can accelerate our ability to integrate new capabilities and -- into our business and accelerate the rate at which we can deliver improvements to our customers and our business. Now of course, in technology, this needs to be underpinned by those core disciplines of security and compliance. So the protection of our network, our customer data from evolving cyber threats is absolutely essential to maintaining trust and uninterrupted service. Now the third enabler is sustainability, and it's an enduring commitment to sustainability. Now what we have done is we've refreshed our sustainability framework so it aligns with our business strategy and emphasizes the connection between sustainability and value creation at Spark. So we've got two clear focus areas here. The first being low impact with high connectivity. This means bringing connectivity to more people across the country, but doing this in a way that protects and considers the environment. So we consider energy efficiency and how we do that. The second focus area is supporting a digital world that's equitable and trusted. And this -- we do this through the way in which we invest in digital equity and the responsible approach we take to things like privacy, data ethics and AI. And if you think about we're in a privileged position as a trusted brand in New Zealand, so whilst we want to work at the forefront of something like AI, we also need to consider how that is used, and we need to consider the downstream risks as well, and put mitigations in place early. Now last but certainly not least is financial discipline, which I'll speak to more now. So the way I think about financial discipline is in that -- under that lens of long-term value creation and put this again under three pillars. So we've got revenue growth, we've got efficiency and we've got disciplined capital management. So revenue growth, and this is consistent with what you would have heard from Greg. We expect mobile service revenue to grow. Now what are the drivers of that? Well, they're going to be customer demand for data, modest population growth. New Zealand should continue to be an attractive place to work and live, and our ability to execute annual price reviews. Now underlying that, we've heard about better network and better customer experience. So our ability to retain customers using a better network and a better customer experience and having a real customer life -- view on customer lifetime value are critical to that revenue growth. And then probably the third piece around revenue growth is referring to some of the examples Renee made earlier about how we can use our investment in 5G stand-alone to actually create new monetization opportunities as well. So that's revenue growth. If I move across to the second leg of this, that's -- of value creation, that's efficiency. And this really builds on work that we've already been doing. And we've started and that comes with the simplification of our noncore operations. It comes with leveraging the global partnerships, which brings scale advantages with them. And it also leverages the continuing investment we're making in AI that Matt spoke to, and that will also be a critical part of supporting the ongoing efficiencies and a lean operating model. Now finally, I will talk to disciplined capital management. And to do this, I will actually just go -- I will go straight to the new capital management framework, which I know I shared with many of you at the FY '25 results presentation, but I'll summarize quickly now for anyone who may have missed out on that. Now this -- it was really important that in the context of a new 5-year strategy, the Board also reviewed our capital management settings as well. And this was done with three clear goals. The first one is to maintain financial strength, the second to ensure an appropriate return from our spend and investment, and the third is delivering sustainable shareholder returns. So if I take the first one, this is about remaining focused on a strong balance sheet. And for Spark, that means targeting metrics consistent with our current credit rating. The second part of this is around any investments or M&A that we undertake for growth will need to meet our hurdle rates. And specifically, they need to be NPV positive. And if we think about using our capital base efficiently as well, they need to generate a return on invested capital that is greater than our cost of capital. And to support this, we've revised or we've introduced new definitions of CapEx. So there's two definitions. The first one is BAU CapEx. So this includes all capital investment in our core business with the exception of spectrum. And so if I give you a practical example, the 5G stand-alone investment that we have been making and we will continue to make will be included as part of BAU CapEx. The second -- so the second definition of CapEx so that sits outside BAU as strategic CapEx, and this includes all capital investment outside the core business. Now this is a pretty -- the criteria for which to qualify here are pretty narrow. So there's a limited -- potentially a limited number of things that would qualify in strategic CapEx. And again, if I apply practical example, so for FY '26, the only thing we have there are the capital commitments we have to the data center business before completion of the transaction. Now this then all feeds down to our dividend policy and to support a sustainable dividend paid out of free cash flow. And so to do that, we've introduced a new definition of free cash flow. This includes changes in working capital and includes the BAU capital expenditure I just described to you, which is that used to operate the core business. And then overlaid on that, we've -- as a policy setting, we've extended the payout ratio, the dividend payout ratio and the policy to 70% to 100%. Now this is a policy setting. It is there to provide flexibility in the future should we need it. Now you have seen in FY '26 guidance, we've included a payout ratio of 100% of free cash flow. We'll also continue to have a dividend reinvestment plan, which will be utilized when we consider it appropriate. It's currently suspended in FY '26, and that's on the anticipated receipt of proceeds from the data center transaction, and a subsequent reduction in debt that, that generates. Now I don't know -- I might have left the best to last. So talking to our financial and our nonfinancial ambitions for FY '30. So left-hand column, I've got the financial ambitions. Right-hand column, I've got the nonfinancial ambitions. So if I go to our financial ambition first, I think the overriding financial ambition that we don't have written here is that we want to generate stable annuity style returns for our shareholders, which are paid from a sustainable free cash flow. That is our overarching financial ambition. Now to do this, we consider that we'll need to deliver low -- we have an ambition to deliver low-digit -- low single-digit CAGR EBITDA growth from FY '25 to '30. Now that will be driven. We've talked about some of the -- the main lever of revenue growth, which is around mobile service revenue. The other leg of this is clearly productivity. So our ambition there is to deliver annualized savings of $150 million to $180 million by FY '30. And this includes labor, includes OpEx, and it also includes efficiencies in the product cost line as well. Now I'm going to drop down to free cash flow here as obviously that is -- that's a critical driver of those stable annuity-style returns. So we're talking about mid-single-digit CAGR from FY '25 to FY '30. If I can just create a bit of clarity there. We think of mid-single-digit growth as 5% to 8%. So if I took the FY '25 free cash flow as a base, I'd say the ambition for that would be at the top end of that 5% to 8% range. Now underpinning this CapEx to revenue ratio of 10% to 12% and we're then targeting a return on invested capital of between 11% and 13%, which is better than the 8.7% that we reported in FY '25. So those are our financial ambitions. We also have our nonfinancial ambitions, which we consider to be quite a critical driver of those financial ones. To reiterate what other members of the leadership squad have said, so customer, right? We want to have a higher than 45 iNPS score which is what we consider to be the best measure of customer satisfaction. At this level, we think we would be -- we would definitely be at industry best practice. Networks. So having been awarded the most reliable network, the widest coverage by Opensignal, it's our ambition to maintain that leadership position. For people, back to what I talked about as people being a key enabler, we're targeting top quartile employee engagement there. And for sustainability, we're focused on our science-based emissions reduction target, which is to reduce absolute emissions, so our absolute Scope 1 and 2 greenhouse gas emissions by 56% by 2030 from our FY '20 baseline year. So with that, I will now hand back to Jolie to provide a bit of a recap on SPK-30 and what you've heard today.

So let me just recap on the strategy. SPK-30 takes a long-term view recognizing the scale and pace of technology changes happening. We're reshaping customer expectations, ways of working and the products and services that will be offered, provides our shareholders with clarity around Spark's strategic priorities, and we will invest to differentiate ourselves from competitors. We are refocusing Spark from a broader digital services ambition back to a core connectivity business with our data center transaction providing clarity on funding, of the development pipeline, our capital allocation prioritized to the core. And we'll continue to build a scalable cost base through partnerships in AI. By focusing our investment on what matters most to our customers, our network and customer experiences, we'll give our customers more reasons to keep choosing Spark and create a performance-driven culture. Ultimately, this will deliver stable annuity-like returns for our shareholders with predictable free cash flow and growing dividends over time as Stewart has touched on. Finish today with our value proposition. This remains a profitable business with strong foundations within our sector. Our core connectivity business is supported by positive tailwinds as connectivity becomes more central in our customers' lives and data usage increases year-on-year. We have leading market positions across all segments of connectivity and leading AI capability and access to new global partnerships that will enhance our competitive advantage in New Zealand. We have a proven track record of cost discipline and adapting our businesses when we need to, portfolio management to manage and support shareholder returns and our focus is clear, our ambition is to deliver growing returns for our shareholders. With that, I'm going to wrap up the presentation section today and move us to Q&A. The leadership team will join me on stage and will take questions from the floor and online. And I'll direct the questions to the most relevant member of the team. We just need a couple of minutes to set that up. Thank you.

Okay. Happy to take questions from the floor. Arie?

Just a couple of questions maybe on mobile first. You touched on the new MVNO platform. And I just wondered what observations you sort of had on the wholesale market at the moment. Obviously seeing some value destroyed by one of your competitors in the enterprise space, albeit they had a very small starting position. So yes, just keen on your observations on MVNO and then we're not going to sort of see value destroyed for the three MNOs by bad behavior and wholesale?

I think if you look at the MVNO market that exists today in New Zealand, it's sort of sitting at just under that 2%. So a range of different providers within that, we are a participant in there and one of the approaches that we're taking to that particular market is making sure that we have a good offering, but we're thoughtful and they have learned off other markets around how MVNO has evolved over time. So from our perspective, we haven't seen anything yet that would suggest that, but we're very thoughtful as we look at the strategy here and making sure that we have good offerings, and we think about how we have structured those offerings.

And just one quick one, too, on broadband. There's nothing in the presentation really in the way of targets for customer numbers or for fixed wireless penetration? I mean, obviously, you've got the investment you've made in stand-alone, and you still do have quite a large CapEx envelope, 10% to 12% going forward. So yes, over the 5-year horizon of the plan, what sort of targets do you have for broadband?

I think if you think about the components of wireless broadband, the big sort of driver within that is the shift and rollout of 5G. So we're about 50% of population coverage at the moment of 5G, so we need to continue to roll that. The closure of the 3G network will also contribute to the release of 850 spectrum and you also saw the announcement we made yesterday around increasing the spectrum holding that we have in the C-band up to 100, which allows us to do more. If you think about then the opportunity to expand because you increase the addressable market, you are able to lift our caps as well within that. What we're also seeing is the different dynamics between fiber pricing, wireless pricing as they change over time, that creates greater opportunity. So our focus will be on growing that. You'll also be aware that we have the most or the highest wireless broadband base in probably developed markets. So we have been leading the charge on this. So the next phase forward is still for us to determine exactly what that will look like in terms of levels. But you could reasonably say maybe within the next 5-year period, wouldn't be unreasonable to expect that sort of 5% sort of further growth in wireless broadband on top of what we have today, but that will follow out your 5G rollout. We're also looking and Greg touched on in terms of the bundling, how we bundle more across that with mobile, so looking to grow that way as well.

And just one more for now from me. Just within the capital management framework, just looking at how you're thinking about retention of businesses versus exiting. And so just looking for at least a little bit of granularity on those noncore businesses, the cloud, IT and procurement, where you do have a very large-scale business but are sort of, I guess, signaling and this is perhaps a question but signaling that you may not be the highest value owner of that business over the medium term. How are you thinking about that? And then also, if you could just touch on how much capital you have invested in that business, so including working capital, and what sort of earnings -- EBITDA earnings are you generating from those three businesses?

Right. There's many questions in that, Arie. So if I start with the first piece. I think when you think about the noncore component or simplifying beyond that core and optimizing those businesses in terms of your private cloud, your IT services and your procurement. If you think about our focus, certainly in the short term, in the next sort of 18 months, is around improving the profitability with that using automation to make sure that we can match some of those services shift to modernize, Mark talked about the modernization of some of those services, and therefore, we need to underscore that profitability there. Those businesses are profitable from an EBITDA perspective in terms of that we don't provide, as you know, down to EBITDA for all of those components of the business, but they are, and they're more profitable than what we see in other markets. I would say also that we always look at all components of the assets that we own and make the decision about whether or not we should be -- we're the best long-term owner for those organizations or businesses that sit within it, segments that sit within it. And you've seen us execute a number of noncore divestments over the last sort of 18 months within that. We'll continue to have a view to that. Are we the best owner? Is this right time within the market, too, to be looking at that? The key kind of assets that sit within there, so Southern Cross, we've talked about before. We have a 40% shareholding in that business. If you thought about -- we will always have some shareholding within it, but we will -- but that doesn't mean we need to be at 40%. We will consider that probably in the next 18 months, when the next part of the cable is developed.

Yes. In terms of the capital intensity of the cloud IT services and procurement business...

Procurement has very little to none...

Including -- well, you have $1.3 billion of working capital and receivables and prepayments, and then, yes, I understand there's not going to be a lot of PP&E for procurement. But across those three businesses, which are nonconnectivity businesses, you've got scale. Just interested in how much invested capital sits in those three lines.

We don't disclose that separately. We haven't done that before.

Yes. I mean, so what we do, Arie, is every quarter, we do -- we run through an exercise where we go down to a ROIC level. Now we don't go any further with that because -- and what we do is we use a consistent cost allocation approach to that. But like any cost allocation approach, there's -- it requires some assumptions. So we're consistently looking at those businesses and what the return is. And as you could deduce, the cloud business users has a reasonable amount of capital deployed to it, may be procurement a bit less. But that's sort of how we're looking at -- that's how we look at those businesses. And yes, within that structure and things there's -- Mark is also doing work that he's talked to look at sort of where we are in the cycle in terms of profitability and what we can also do to optimize the efficiency in those business as well and improve returns in the sort of -- in the -- under the -- in the current term.

Yes. I guess just in the context of financial discipline, though, I guess, sort of if you've got confidence enough to share numbers externally, it means that there's a lot of discipline going into how they're provided. And so I just wonder whether you're looking at the returns you're generating in that business, and like I said, in the retention versus holding, making sure that you're maximizing returns. We've just recently seen Fonterra obviously come to a realization it wasn't the highest value long-term owner of a consumer business, and it's done very well out of exiting that by the looks of it. Just wondering whether you've got the same sort of lens when you look at what is a large business that you've identified outside of its core. That's where I'm sort of looking for some comfort from.

We will continue to assess each of those businesses and make a decision. By the mere fact that they sit in that part of the strategy, capital allocation is going to the core, and then we will make decisions at the right time against each of those businesses as to whether we are the best holder or not.

Yes. Can we just give a little bit of color on this 5G stand-alone and the opportunity? Like what percentage of enterprises out there could this be applicable for? And then sort of the value to you guys, I assume it's a higher cost to enterprises. Sort of is it 10% more expensive? Is it double the cost sort of? I don't really have any idea about that.

Okay. Mark, do you want to just talk about the types of examples that...

Yes. So there's two types of 5G networks. There's private networking, which is used for businesses that might want ports or manufacturing facilities where they have their own network and they use 5G and they get lower latency and they get a private network. And then there's a stand-alone piece for businesses where they might have a slice of the network and use it for different purposes, whether it be for prioritization of traffic or other slices for different things. So we haven't -- we're working through that, obviously, with the network team on how we would bundle that up as a service for customers. We're trialing 5G private networks at the moment. And obviously, as 5G standalone gets rolled out, we'll start looking at what those use cases might look like. And then over the top of that, you've got, as Renee talked about, Network-as-a-Service, which is Aduna and things like that, where you can start bundling different types of use cases for customers and it might be fraud detection or it might be other use cases as those APIs start to develop. And as they start to develop, we'll look at how we can productize those.

But you think about them in a way, sort of different to an ARPU calculation, it's more around a service contract for a period of time for a use of a particular part of the network within that. And keeping in mind too, the stand-alone core now supports our core traffic for all of our mobile network traffic, we're moving across to that. What that creates is greater capacity. If you think about the discussion we had just before about wireless broadband, the other opportunity opens up as -- for us to take much more traffic across the network. It allows us to lift our caps within that. So if you think about the return, a lot of that return is about the shift on to 5G of wireless broadband as well.

And maybe just on this bundling opportunity that you talked to. Is this more just a loyalty improvement? Or is there actual financial uplift? Because I would have said you've got a much higher market share in mobile. I would have thought most of the uptick you can bring is onboarding more broadband customers, and once you add a discount to, say, a fiber product, the profitability will be pretty negligible.

I think what you've got to think about within that loyalty goes to also retention and holding on to high-value customers in terms of within that and making sure you're offering them a range of things together. So the churn reduction, the difference in churn between those customers that hold more than one service with us is much higher. So there's a straight value equation there from doing that. I don't know, Mark, if you want to talk about more of that?

I think the other thing that -- there's also a customer experience benefit. So when we talked about the outage assist proposition, 450,000 instances of fiber outages, 6.3 million gig of data applied to customers. So there's value there. And then you can start to think about the construct from a customer perspective and how it's actually positioned as a companion within a broader plan.

So sort of recognizing the valuable base that we do have and making sure that we retain that base, as you point to, with a leading share in this marketplace.

And then maybe just on sort of fixed wireless. We know it's quite a lot higher gross margin. But if we roll down to sort of an EBIT or free cash flow margin for, say, 5G, obviously, it's a more expensive modem that you've got to get to the consumer, I assume call center cost may be a bit higher for the fixed wireless side of things. How much is it?

It's way smaller, yes.

Is it at the sort of free cash flow EBIT margin between the fiber and...

Well, if you think about our -- and Renee can touch on in a minute, but if you think about our mobile networks, we design them to be able to serve our mobile services. So they're always prioritized. So the capital investment that's already going in there exists already for our 5G networks. So this is about monetizing that part of the network. So therefore, when you think about the cash implication of shifting or replacing a fiber line, it's quite substantial because we have built the network already. We already have the spectrum that we're operating across it. Modem costs are different. So 4 to 5 are different. There's no question. But as you look around the world and what we're seeing internationally is that 5G or wireless broadband is growing in the states, other countries, that starts to bring your modem costs down. And in the life of a customer and in the life of an arrangement like that, that is a relatively sort of short to medium-term incremental cost when you think about retaining a customer for a longer period of time and being able to offer a service that also matches with what an entry like fiber might look like as well when you look at the speed. So that's where the value equation and cash equation comes from. And it delivers around about $130 million of broad terms already today of margin savings from replacing that fiber. I don't know, Renee, if there's anything else you want to add?

And to Jolie's point, very much the network investment we're seeing is a cost of doing business, right? So we are needing to introduce 5G from a mobile network perspective. So this just offers a way for us to monetize that investment in a different way and make additional margin. I think from a 5G wireless broadband perspective, what we are seeing and talked about it earlier is just that increased or better customer experience. So significantly higher speeds, which makes it more of a competitor to fiber, so that makes it a more compelling proposition. And also the customer experience that we're able to wrap around that as those modem costs come down. So we see it as a way of kind of accelerating our ability to get return on investment for the network investment.

Other questions in the room?

The satellite provider, is this going to be an example of just sort of keeping up with the Joneses or one in this case? Or can you monetize it?

I think when you think about the coverage and service quality, what people expect of a resilient mobile service, I think satellite adds to that. It is another provider, much the same way you have a fiber provider within that. We will continue to look as we launch -- move towards launching that service at what monetize opportunities there are within that in terms of the structure. There will be some things that I think would be included in plans. There may be other things that we'd look to do separately with monetization. When we are ready to launch that into the marketplace, we'll share a bit more about those plans.

So I don't want to preempt that, but beyond text, where can it go?

Well, over time, there's obviously ambitions to add voice and -- but if you think about the whole of New Zealand at the moment, so it's 2,000 towers supporting, there's lots of spectrum that helps support the service that mobile providers already have today. This is about complementing the edge of the network and where people don't necessarily always get that service when they want it.

Can you just clarify the -- when you're talking about the data center and modest annual capital commitment, what does modest mean?

So do you want to talk...

Yes. So I mean, I think we've talked about the construct. So DC Co becomes an entity in its own right. It has its own leverage and therefore, as its EBITDA grows, its ability to take on more debt also grows as well. So our equity contribution as a 25% owner is something between $10 million and $20 million a year.

And is that counted as sort of BAU strategic CapEx?

I think we'd probably count that as strategic CapEx.

Otherwise, we do have a question from online?

Thank you. We have a question online from Entcho Raykovski of Evans & Partners. Structurally, how do you see the opportunity in wireless broadband given the recent slowdown in subscribers? And how much of that recent slowdown is in your view, cyclical? And the follow-up to that, I guess, is where do you think wireless broadband subscribers can get to as a percentage of the greater broadband subscriber base by FY '30?

I think, in part, we've probably touched on some of this already. But to the question of how much is cyclical, I think the economic environment means there's lots of competition in and around particularly at low end of broadband. If I think about wireless, so the biggest opportunity is with the 5G rollout and the continuation of building customers there and the bundling that exists with mobile. So from a point of view, we already touched too on the potential to continue to grow that percentage of the base. I have already said too as well from a developed market point of view, we are already leading. So I think in that next period, you're probably talking somewhere up to that 5% growth, if all of those things were to come through within that we would look to grow that base.

Okay. Just two questions from me. First one is for mobile. I think some industry data has suggested that Spark has lost a bit of market share over the last couple of years, whereas it seems like the customer satisfaction score has doubled. Can you just talk about the disconnection there?

If we want to talk about our market share, and if you look at it, we provided some information in our full year results. So if you look at for the last 6 months, we lost about 0.4 of a percentage point. One also had a similar impact. Two grew -- 2 degrees grew slightly, and then MVNO was the main growth within that market. Still sits in and around about that just under 2% of the market share. So I think from a point of view of market share, our focus is very much on driving retention of existing customers in those high-value segments. There are certain parts of the market that we have Skinny to compete in, but we wouldn't necessarily drop to the lowest part of the market. Our focus is very much on providing good service, continuing to recognize customers within that and being competitive, particularly in the enterprise and government area where we have seen more price competition in that part of the market, which would have had an impact on the service revenue given our share is so high within that part of the marketplace. And that's really more about some price competition within it. Keeping in mind that mobile and enterprise and government is roughly around sort of 10% of our mobile revenues. So we don't see the same dynamic that we have seen in the enterprise and our consumer base.

And then the second question, maybe for Stewart. So in terms of the free cash flow ambition for FY '30, you just mentioned that the base is FY '25. So you've changed the definition of free cash flow at the result. Can you just clarify whether the FY '25 figure is based on the old definition or the new one?

Yes. So we've used the new definition so we treat it consistently. So -- and in the results announcement pack, we've included a reconciliation between the old and new definition of free cash flow. So FY '25 free cash flow based on the new definition, so FY '25 base is $260 million.

And then we've also guided...

Yes, and we've guided for '26. So the guidance -- the range of guidance for '26 is $290 million to $330 million.

Just another one from me. Just on MATTR and clearly, not going to get any new information, I hope from my first a lot of questions in terms of financials. But just in terms of the partner process, I mean, is it your expectation that there's going to be some value realization out of the back end of that? And then also second question on it is, is your preference for a full exit or to remain in it with a partner.

Well, we're in a process right now, as you've noted, looking for investment partners to come on board, which would see us dilute our holding. Really the impacts of that process will determine, I guess, what our overall shareholding would be. But again, those assets sit inside the second part of the equation in terms of simplify the core. So our focus for capital allocation will be to core business ahead, and that process allows us to do that.

And yes, just -- should we expect some value realization for the investment you've made to date?

We'll update you when the process is complete, Arie. As you see, we've run through a huge amount of processes and divestments over this last 6 to 8 months, whether that's the data centers, whether it's the other disposal of noncore assets, and we've had a discipline in running those processes, and this won't be any different for the MATTR process.

And then just, Stewart, on the CapEx envelope of 10% to 12% and the low single-digit EBITDA guidance range. Would it be fair to say that your expectation would be that there wouldn't be a lot of strategic investment being made within the over and above business as usual for you to hit that bottom sort of low-end EBITDA guidance? Or is there strategic investment included outside of your immediate DC commitment to get to that guidance?

Well, and [ Simon ], if you -- it's a good question. But if I think about the strategy, the strategy is to focus on -- is a focus on core connectivity and it's allocating our capital to that. And so sitting here today, do we consider that we have sufficient capital resources to be able to invest in those -- in connectivity, then yes, we do, and we can do that, and that is all within that BAU CapEx envelope. I mean if -- and so should there be anything in the future, it would need to meet those investment hurdles. And so it would need to have an accretive return on invested capital, it would need to be NPV positive. Sitting here right now, there's -- we're not looking at anything that we would put our finger on and say, yes, that's something we would do. And therefore, it may qualify for that strategic CapEx bucket.

Jolie, if we look at the start of '26, the cycle hasn't turned pretty clearly and competitive intensity doesn't appear to have dropped either. Like if this carries on another 12 or 18 months, are there other cost levers you can pull to achieve that? Or does that sacrifice some long-term goals?

I think we've always taken a balance and you know over the years of -- the reality is we're in an industry that you have to continue to look at your cost and whether that's -- we've got about $1.7 billion sitting up in cost of sales. We also have close to $900 million in that labor and OpEx component within it. We already have some ambition for this year around that range of $30 million to $50 million of productivity savings sitting in that area. What we would look -- to the extent that there was further economic deterioration, we would, of course, need to look at both our cost base, but also our capital spend within that because at the end of the day, those things need to come together to deliver on our free cash ambitions within it. And we would make -- depending on where that was, where we were seeing that exposure, we'd make the decisions around, for example, are we right owners of parts of the business, and we would look to move. So do we have more productivity to come? Yes, we do. And we sort of set that target out of that $150 million to $180 million net by the time we get to FY '30. And that really looks at offsetting inflationary costs we see come through, plus continuing to use automation and technology to really shift us forward in terms of the cost base. And Matt sort of talked to some of the things that we're already thinking about within that. The global partners are a key part of this as well in terms of the profiles we've set with them and our ambitions for what we want to achieve through those partnerships.

Just maybe one on the network proactive resolution. Like is that cost out? Is that monetization? Is that retention? Like what's the return from what looks like should be a core function?

Yes, I think when you think about -- well, and Renee, actually, I'll hand to you, Renee, you can talk about that, and then I can come back.

It's multiple things. So absolutely, it would be cost out. Part of our partnership with Nokia was looking at how we can increase automation around things like anomaly detection. So yes, it as BAU of what we do today, but it's leveraging tools like AI so that we can do it better and better. And there is also a strong improvement to the customer experience, obviously. The example that I gave around OTN 2. If you can automatically detect when there's a problem, and then you can resolve it ideally or provide a better customer experience through things like outage assist, that is just one of the ways that we help customers to feel like they can rely on their connectivity. So for me, it's very much a cost side to it, how do we simplify and streamline the business and how do we get a better customer experience at the same time.

And increasingly productive, I think, as well, [ Paul ]. So that allows you to better focus your maintenance spend, where are you spending capital, is it really aligned to where we need to complement the network experience for customers and therefore, aligning both of those operating costs and capital up.

Yes. Stewart, just had a few questions on Slide 27, which is looking at these noncore assets. I think we've already talked a little bit about MATTR, but I was just interested to talk about the other three. So the subsea cable stake, the satellite business. And then a little bit more detail around -- you got the cloud infrastructure business. Are we talking about the old Revera business when we refer to that. So I suppose I'm just interested in kind of the -- it says we're looking at your ownership options over time, but I was just wondering if you can give us a bit more of a clarity in terms of a time frame and process around those other three noncore assets?

I guess it's a little bit of a build on Arie's question, I would say. Maybe you want some clarification, and you can process around private. So private cloud infrastructure is a combination of what we had acquired both through our CCL and Revera acquisitions, but also our own investments over time. So we've held those businesses for a long period of time. Equally, they have the data centers in them, so they're linked to the data center transaction with that. The infrastructure that sits there, we've done some work around modernizing that and making sure that we have kind of the best cost available for that. When we think about what's happening in terms of that sector and segment, we see strong growth in public cloud. Private cloud will over the longer term, we think decline within that. It's not a linear line like voice. It has a different profile than that, and we'll see a combination of hybrid cloud. So from our perspective, it's about making sure we are getting the best return we can as we see that shift between public and private. And then as I sort of put it to Arie, we would make the right decisions around are we the best owner at the time too and then consider that process ahead. I can't remember what else you asked.

You had Southern Cross there, Phil? Yes. So with Southern Cross, I mean, we're in that, we're 40% of that. And if you think about the value of a subsea cable, so that's -- the cash flows in that can be quite lumpy and therefore the sort of peak valuation tends to come just after you've developed an asset there, and so that's going on at the moment. So you think about -- so there, you think about where does peak value -- where is peak value map. But I mean, also, there's also the question of liquidity in that investment as well. So you have a willing -- do you have a willing partner as well. But I mean there is clearly value there and that value will be optimized in the near future.

I think to people looking at the annual report, these things around the EBITDA, it's not necessary a way that you think about valuing that business because of the lumpiness that Stewart just talked to. And if you think about our share in broad terms, just to give a context around our value there, our ownership probably sits around somewhere just south of the $100 million mark. And core connectivity from international cable is a key part of still running our business. So we need to be able to have international connectivity that wouldn't necessarily be any kind of view around the different ownership structure, would perhaps be around less ownership, not no ownership. We've got one online, Rodney?

Yes. We've got another question from Entcho Raykovski from E&P. In your aspiration for low single-digit CAGR and EBITDA to FY '30, what is your broad assumption around the economic cycle and macro conditions? Where are the areas you could see cyclical upside or potentially downside?

Yes, I'm happy to take that. So I mean, we've clearly been in quite a -- we've been in a relatively long downturn. So I mean, we have -- so in that context, look, we've been relatively conservative about how we thought about the economic cycle and macro conditions. But I mean, we also consider that there should be some benefit coming through the cycle if you look forward to 2030 as well. And so, Rodney, the other, where were the areas you could consider cyclical upside, was that...

Yes, that's right. Where are the areas you could see cyclical upside or potentially downside?

I mean, probably the major area of cyclical upside would be around how you saw mobile service revenue grow. So we've talked about customers demand for data. We've also talked about population growth. So I mean, you'd expect population growth to potentially come with a bit of cyclical upside. Well, net migration to New Zealand has been pretty lean over the last 18 months or so. So that would be an opportunity. There'd be opportunity -- Mark, did you have anything in your -- I mean, there's clearly opportunities probably in the enterprise business as well that we looked at.

As we talked about, I mean, there's things like the newer network pieces that have come into play. But we haven't seen that growth curve come yet in our enterprise but...

I think more holistically, if you thought about, we're in -- we've been at the bottom of a cycle, particularly when you think about government and enterprise spending overall, particularly on tech deferrals and other things. So as you start to come out of the bottom of that, we'd expect to see some demand continue to increase. As Stewart said, we've been fairly conservative about how quickly that happens and when that happens. But over a strategy cycle, that most definitely will happen, and that will be another area that we'd continue to see potential opportunity. In terms of the question of downsides, I think we talked about a little bit before with Paul's question really around we'd always be looking at the toggle between what we need to do on productivity and cost to be able to offset anything that we saw around revenue, if, for example, there was longer, more prolonged periods of economic downturn. However, given we haven't counted on a lot of upturn in this next period, certainly in the next year or so, I think that's more muted, the potential risk associated with that.

For Matt and possibly Renee as well. Why have the telco sector been so poor at retention plans or loyalty plans? Like obviously, you see it in other industries like airlines and so forth. But yes, telcos have been pretty bad at it. So why is that?

I can start, maybe Greg might want to jump into on loyalty. So we've taken a look at this. And what we see globally is that we haven't seen evidence that our traditional loyalty plan performs to a high level. So airline points type of thing, a lot of telcos have tried it. We -- if you don't have anything to use for loyalty, you need to probably spend something like that. We have quite a sophisticated AI infrastructure that already can identify customers and target them through channels. So our approach is for different segments, what does reward and recognition mean to them, what's the appropriate level of reward and recognition and then what have we got at our disposal to make them feel that they're valued as customers. So rather than just sell to them, how are we giving them exclusive offers, how are we giving them money can't buy experiences that we as a brand can deliver. And we can scale that quite quickly. I'm not sure Greg, if you'd add to that.

I think that's good. And then the ability to personalize things that are relevant to specific customers is getting better and better, and it becomes less transactional and about always needing the customer to do something for that value. The other piece, it looks back to the earlier question around why we're putting so much effort into customer experience. So when you look into the detail of iNPS, we know that a promoter is twice as likely to stay with us as a detractor. So ongoing investment in that area to improve our customer experience is also part of the loyalty play.

You talked before about the 40% of your customers are in this sort of premium segment. I assume a good chunk of that is sort of customers on all-you-can-eat plans. So with data usage growing and AI is probably going to fuel this, when do you expect sort of the vast majority of customers to already be on all-you-can-eat plans? And do you think when that happens, your pricing power would be a bit less versus today?

Do you want to talk to that, Mark?

Yes. Look, I think there's a fair bit of the market has gone unlimited. So then it's about what are those other proprietary features that you can add in to keep innovating within the category to create value. And then there's always going to be a segment of the market where they don't need all-you-can-eat, right? So if you look at the prepaid segment, for example, the main customer driver there is cost control and hand to mouth. So I think it's always about having a range of propositions that meet your customer needs and not everything will need to be unlimited.

And of course, remembering that the market is made up just over 50 sort of percent as pay monthly and 50% is prepaid as people look to seek to get greater data, maybe not right up into the top unlimited component, there's still a movement up the data curve, which enables monetization within it.

And then just on the spectrum deal you announced earlier, can you give a bit more details on sort of the financial side of things? How is it sort of structured? I assume it's because the 18-year deal goes through the P&L rather than CapEx? Is that the way to think about it?

So in terms of how you think about that, that we will pay for that spectrum over -- annually over a period of time. Not really going to provide any more commercial deals. It's a partnership though that we're pleased to do because it looks at a range of things, not only around the actual spectrum but also looks at working together on certain elements. So I don't know, Renee, if you want to talk about a little bit more on that partnership?

I think one of the really exciting things about the partnership is it is broader. So there's a spectrum side of it, but we're also looking at working with Tu Atea around making available small cells for regional connectivity particularly Maori-based solutions that can help drive connectivity in hard-to-reach spaces. We're looking at options around civil defense and emergency sort of deployables as well. And then also looking at opportunities around workforce development and how we can encourage Maori talent into the tech sector. So it's a really broad partnership and something we're very proud to be part of.

And just for clarity, it's a right-of-use asset, so it will have amortization, but you can see the payment is annual as well within it. We've got one more online.

Yes, I've got a few more online. The first question comes from a shareholder, [ Edmond Good ]. The question is, do you think there's enough ambition in the strategy to support achievement of your long-term goals.

I think when you think about the ambition strategy, it's really around a return to our core. We have market-leading positions in all of the core connectivity that we have. We're investing heavily behind our network. We're looking to drive the growth we see across multiple products within our business. And when you think about the importance to New Zealanders of continuing to be able to grow, use more data, and have a digital economy, that doesn't exist without the digital infrastructure that we provide. So what we've done here now is really focus on what's important, what's critical, what we can provide and what we have clear leadership to do. Same time, we've taken and made sure that on the second part, the simplify and optimize, we are making good choices about the businesses we won't be in or applying as much capital to over a period of time. So we think there is enough ambition there to underpin the growth we want to see in earnings and free cash flow and then the dividends that flow off that as well, while being able to reinvest in building this core business because it sits at the heart of the digital economy.

Okay. And then just another question from Entcho at Evans & Partners. In pursuing satellite to mobile, do you expect that you'll need to deploy some capital to develop ground station infrastructure? If so, what's the quantum of the investment? But if not, how do you think about the ongoing payments to third parties to deliver this technology?

Yes. There are various ways that you can provide satellite to mobile technology. Within the plan that we're looking at the moment, we don't have current and near-term requirements to build ground station infrastructure, but it could be something that we look at in future years. Right now, we are focusing on getting the satellite to device technology working and making sure that we can test and prepare for the launch of that in the first half of 2026, so that it is able to provide that service for customers.

Okay. No more questions online? Anyone in the room? Otherwise, thank you for your participation and contribution and ongoing support, and we're happy to catch up with a cup of tea afterwards, if anyone has any further questions they'd like to ask. So Thanks, everyone, for attending today.