SPK - Spark NZ

[Basil]

Except from closing market commentary today.

A setting sun

Spark was the most heavily traded stock on the day with a volume of almost 4.5 million shares, falling 2.5% to a 15-year low $1.775. Australian telco Telstra was also weaker with the sector coming under growing scrutiny from the impact of low orbit satellites, and S&P Global today said Alphabet would replace Verizon in the blue-chip Dow index.

[Red Baron]

Excerpt from closing market commentary today.

"A setting sun

Spark was the most heavily traded stock on the day with a volume of almost 4.5 million shares, falling 2.5% to a 15-year low $1.775. Australian telco Telstra was also weaker with the sector coming under growing scrutiny from the impact of low orbit satellites, and S&P Global today said Alphabet would replace Verizon in the blue-chip Dow index."

A vairly zilly piece of commentary re Zpark I theenk.

How can zending expensive telecoms equipment by rocket into a low space orbit vhere it can't be zerviced and vhere it vill burn up on re-entry 'after 3-5 years or zo', be 'cheaper' zhan activating a pre-existing vibre cable zhat already runs to your house?  Whoever wrote zhat has been paying too much attention to Elon.

The other obvious vlaw een thees commentators thinking:   Zpark does not own ze terrestrial broadband network - Chorus does.   Zo even eef eet eez zomehow possible vor Zatellite connection to be cheaper, Zpark can zimply zwitch wholesale zupplier vrom Chorus to ZpaceX (or whoever).   It makes no deeference to Zpark who vins zhis technology var.

RB

[allfromacell]

A fairly silly piece of commentary re Spark, I think.

How can sending expensive telecoms equipment by rocket into low Earth orbit, where it can't be serviced and where it will burn up on re-entry "after 3–5 years or so", be cheaper than activating a pre-existing fibre cable that already runs to your house? Whoever wrote that has been paying too much attention to Elon.

The other obvious flaw in this commentator's thinking: Spark does not own the terrestrial broadband network — Chorus does. So even if it is somehow possible for a satellite connection to be cheaper, Spark can simply switch wholesale supplier from Chorus to SpaceX, or whoever. It makes no difference to Spark who wins this technology war.

RB

I think satellite is clearly a threat to Spark, not something to dismiss.

Starlink NZ is already offering unlimited 100 Mbps broadband for $85/month. Spark's comparable unlimited Everyday Fibre plan is $91/month, rising again soon?

And Starlink is not loss making anymore, SpaceX's Connectivity segment did around US$11.4b of revenue in 2025, with roughly 39% operating margins and 63% adjusted EBITDA margins.

Yes, the satellites need replacing after a few years. But that is not a killer argument if the business is already producing those kinds of margins while investing heavily in growth.

The bigger question is: why would SpaceX even need Spark for broadband? Starlink is already direct-to-consumer. Spark may be useful for satellite-to-mobile, where spectrum, billing and phone plans matter. But for home broadband, the risk is that Spark gets bypassed entirely.

[Red Baron]

I think satellite is clearly a threat to Spark, not something to dismiss.

Starlink NZ is already offering unlimited 100 Mbps broadband for $85/month. Spark's comparable unlimited Everyday Fibre plan is $91/month, rising again soon?

Cost of Starlink Kit (for zetting up Starlink) eez $599 een N.Z. .  Zo not cheap to 'zet up'.

Starlink is not loss making anymore, SpaceX's Connectivity segment did around US$11.4b of revenue in 2025, with roughly 39% operating margins and 63% adjusted EBITDA margins.

Yes, the satellites need replacing after a few years. But that is not a killer argument if the business is already producing those kinds of margins while investing heavily in growth.

The bigger question is: why would SpaceX even need Spark for broadband? Starlink is already direct-to-consumer. Spark may be useful for satellite-to-mobile, where spectrum, billing and phone plans matter. But for home broadband, the risk is that Spark gets bypassed entirely.

SpaceX prospectus:
https://content.spacex.com/cms-assets/FINAL_Documents%20and%20Updates/SpaceX%20-%20EU%20Prospectus%20(Approved%20by%20Bafin)%20-%20June%205,%202026.pdf


p101
"We monetize Starlink primarily through subscription plans paired with hardware sales."

p60
"We charge our Starlink Subscribers a monthly subscription fee, which varies based on geographic market and download speed, plus typically a one-time upfront terminal cost."

'Connectivity' EBIT = $4.423b

Apparently 'depreciation' vas included een ze 'Cost of revenue' (total $5.921b), but not zeperately deesclosed. (Refer p142 of prospectus)

Go to zection 5.8 vor ze 'Consolidated Results' (plus zection 5.8.2.2 vor 'Connectivity')

Connectivity accounts yor $11.387b/$18.674b = 61.0% of operations.

Net interest bill vor SpaceX = $1.945b - $0.492b = $1.453b
Connectivity zhare of SpaceX total eez 0.618 x $1.453b = $0.886b

Zo NPBT vor 'SpaceX connectivity' eez $4.423b-$0.886b = $3.587b
ne

21% 'US Vederal Tax Rate' suggests NPAT of 0.79 x $3.587b = $2.834b

Zo 'Starlink' 'Net profit Margin' (connectivity) for FY2025/CY2025 vas: $2.834b/$11.387m = 24.9%

Broadband revenue at Zpark for FY2025 vas $608m (eencluding 'een house vireless broadband' which is lower cost. $608m made up $688m/$3,623m = 16.8% of all revenue.  Apart from rural areas, zo far Zpark has not zeen zignificant market share loss to Starlink.

RB

[Buzz]

Cost of Starlink Kit (for zetting up Starlink) eez $599 een N.Z.

No it's not, it used to be. I've recently moved from OneNZ to Starlink for Broadband service, the kit was supplied free of charge (sat-receiver and house mountings, modem/router, power block, 15m CAT6 cable), a kind of zero cost rental arrangement, i.e. supposed to return it if you cancel your sub. In my case I doubled my previous down/up-load speeds (from a VDSL service) and the service has been rock solid reliable, at about 30% saving in my monthly costs.

[allfromacell]

SpaceX prospectus: "https://content.spacex.com/cms-assets/FINAL_Documents%20and%20Updates/SpaceX%20-%20EU%20Prospectus%20(Approved%20by%20Bafin)%20-%20June%205,%202026.pdf" (https://content.spacex.com/cms-assets/FINAL_Documents%20and%20Updates/SpaceX%20-%20EU%20Prospectus%20(Approved%20by%20Bafin)%20-%20June%205,%202026.pdf)

p.101:

"We monetize Starlink primarily through subscription plans paired with hardware sales."

p.60:

"We charge our Starlink Subscribers a monthly subscription fee, which varies based on geographic market and download speed, plus typically a one-time upfront terminal cost."

Connectivity EBIT = $4.423b.

Apparently depreciation was included in cost of revenue, total $5.921b, but not separately disclosed. Refer to section 5.8 for the consolidated results and section 5.8.2.2 for Connectivity.

Connectivity accounts for $11.387b / $18.674b = 61.0% of total revenue.

Net interest bill for SpaceX = $1.945b - $0.492b = $1.453b.

Connectivity's pro-rata share of SpaceX net interest = 61.0% x $1.453b = $0.886b.

So NPBT for SpaceX Connectivity is $4.423b - $0.886b = $3.537b.

A 21% US federal tax rate suggests NPAT of 0.79 x $3.537b = $2.794b.

So the estimated "Starlink" net profit margin, using Connectivity as the proxy, for CY2025 was:

$2.794b / $11.387b = 24.5%.

Broadband revenue at Spark for FY2025 was $608m, including in-house wireless broadband, which should be lower cost. $608m made up $608m / $3,623m = 16.8% of operating revenue.

Apart from rural areas, so far Spark does not appear to have seen significant market share loss to Starlink.

I think your numbers are wrong, but even if they're not you're not really proving the bear case wrong.

If Spark has a worse product that costs more they will bleed market share over time. Starlink has only very recently started aggressively marketing their service in NZ.

A very clear bull trap imo.

[Buzz]

A very clear bull trap imo.

More a dividend trap imo, and that with the uncertainty whether the dividend can be sustained. Been like that for a while, day of reckoning may be closer than some acknowledge, on top of their capital having been decimated. Lots of passive hold investors getting ruined with this company.

[Shareguy]

More a dividend trap imo, and that with the uncertainty whether the dividend can be sustained. Been like that for a while, day of reckoning may be closer than some acknowledge, on top of their capital having been decimated. Lots of passive hold investors getting ruined with this company.

Agree. I was in the Spark corporate box years ago watching the rugby and having a beer with some of the Spark executives. They were talking about how to improve the business and I said to them I know the answer to that question and it can save you an awful lot of money on marketing. " Answer the fn phone" true😂

[Red Baron]

I think your numbers are wrong, but even if they're not you're not really proving the bear case wrong.

I gave you zee reference.  Eef you theenk I have made a mistake zhow me....

If Spark has a worse product that costs more they will bleed market share over time. Starlink has only very recently started aggressively marketing their service in NZ.

A very clear bull trap imo.

Vibre broadband eez not a vorse product.  Eet can't be.  Latency eez not eemproved by zending a zignal eento zpace.  Although I vill acknowledge zhat vith Starlink LEO zatellites, ze difference eez zo zmall zo as not to be noteecable een most applications.

RB

[Red Baron]

No it's not, it used to be. I've recently moved from OneNZ to Starlink for Broadband service, the kit was supplied free of charge (sat-receiver and house mountings, modem/router, power block, 15m CAT6 cable), a kind of zero cost rental arrangement, i.e. supposed to return it if you cancel your sub.

O.K.,zhanks, good to know

In my case I doubled my previous down/up-load speeds (from a VDSL service) and the service has been rock solid reliable, at about 30% saving in my monthly costs.

Not zurpising.  VDSL eez not vibre.

RB

[Buzz]

O.K.,zhanks, good to know

Not zurpising.  VDSL eez not vibre.

RB

If you wrote in plain English Snoopy, I'd take you more seriously, otherwise it's just dumb gibberish. I don't know why you persizt with thiz nonzenze, do you zink etz funy? It's not.

Recently Spark actually sent me an email asking whether I was on the right Mobile plan. Turns out I'm not, I did look into it. I can make about 70% savings moving to a monthly pre-pay with Spark based on my usage. So I looked elsewhere, whoa! I can save even more by dumping Spark and moving to another supplier.

Credit to Spark that they asked, but pretty dumb that they didn't follow up with a 'special' offer for me that beat out the competition. 

This imo is a company going backwards, fast. Investors are already caught in a dividend trap, with no evidence that dividends are sustainable, or that their capital will not be decimated further than it has already.

[Basil]

Agree with Buzz, this has been a divvy trap for ages, plain as day . $85 a month for 100 mb/sec satellite broadband with Starlink with no set up costs is very attractive for all those not on fiber.

[entrep]

If Starlink was a threat then wouldn't CNU be suffering? Instead it's near ATH.

[Basil]

Starlink have only very recently dropped the set up costs which was originally about $1000 from memory, then dropped to about half that and now the equipment cost is free. Likely to start attracting significant market share from here I reckon.

[Red Baron]

If you wrote in plain English Snoopy, I'd take you more seriously, otherwise it's just dumb gibberish. I don't know why you persizt with thiz nonzenze, do you zink etz funy? It's not.

Baa baa, You really pezist vith zhis myth zhat I am zhat piece of 'unmentionable doggy do'?  Vhen eet eez obvious I am heez arch nemesis?

Vell I vill tell you sometheeng.  Last dogfight we met, he called me a "Cabbage brained sour Kraut."   I zimply retorted zhat I thought he vas a 'vool'.   Zo ve do at least have a kind of 'mutual respect', eef you can call eet zhat.   

I do not tolerate 'vools', except my good grace on Christmas eve means zhere eez zhat vone day in ze year my Christmas spirit overrides my common zense.   (plus I do get to read zhose zecret ztock research papers vrom zhat overhyped hound dog's satchel vhile he eesn't looking- heh, heh!)   

Anyways zhis 'sour Kraut' has manged keep zhat 'pompous pooch' out of zhis vorum so var, vhich I am sure eez zomething many on here zelebrate!

RB