Greetings and welcome to our full year results announcements for FY 2022. I'm JB Rousselot, the CEO of Chorus, and with me is Andrew Carroll, who I'm sure many of you will recognize. Andrew is back in the CFO seat as an acting capacity while we finalize the recruitment of a replacement for David Collins. We're gonna cover the usual areas as summarized on the slide, including key results, financials, guidance, and trends, and then we'll take questions from the phone at the end of our presentation. Our focus in FY 2022 was to keep pushing towards our goal of 1 million fiber connections by December. Covid hasn't made that easy with lengthy lockdowns and the ongoing effects of illness and isolation on our workforce and on consumer activity. Despite that, we grew total fiber connections by 88,000 to 959,000.
We remain on track. Net broadband connections grew by 9,000 connections, fueled by strong growth in our fiber area, about 27,000, and a slowdown in broadband losses in LFC areas as they get to high levels of fiber take-up. This also helped us significantly reduce the decline in total connections from 75,000 in FY 2021 to 35,000 this year. We ended the year with just over 1.3 million total connections. This total excludes the 9,000 student households that we continue to support as part of our COVID response with the Ministry of Education. Underlying EBITDA was NZD 660 million, up NZD 3 million from the restated FY 2021 EBITDA of NZD 667 million.
When you allow for one-off revenues and the release of a holiday pay provision, reported EBITDA was NZD 675 million, and these one-off entries were already flagged in the half year results. Net profit after tax was NZD 64 million, compared to the restated of NZD 51 million in FY 2021. We've confirmed a final unimputed dividend of NZD 0.21, taking total dividends for the year to NZD 0.35. Fibre uptake continues to track well and grew from 65%-69% within the UFB footprint. In our initial UFB1 area, uptake is at 74%, and Auckland, our largest region, is higher again at 79%. We're also really pleased with the uptake in Wellington, where we have cable competition and uptake grew 6% to 68%.
In the smaller UFB2 communities, we saw an uptake grow from 42% to 50%, even with another 42,000 addresses passed by the rollout. Of the 117,000 fiber installations completed during the year, about 43,000 were generated through our managed migration program. That was down sharply from 60,000 managed installation in FY 2021, and it reflects the challenges that Covid put on our suburban direct marketing. To help offset that, we switched our marketing focus to our base of pre-installed fiber sockets. As you can see, that produced some really positive results. We lifted activations from managed migration to about 32,000, of which 16,000, so half of them, were from off-net premises. We're now seeing an activation rate of just under 60% within 12 months of our managed installation.
This slide should be familiar from our last quarterly update. We're continuing to see good broadband growth in our UFB footprint as consumers migrate from copper to fiber, and that is helping offset much of the reduction in copper voice lines. At a high level, we're seeing a slowdown in line loss in other fiber company areas or the LSCs as the pool of remaining copper customers reduces. In fact, we experienced a 45% reduction in connection losses in the last 12 months in the LSC footprint. In non-fiber area, we've seen a slight lift in line reduction, with some retailers moving consumers off copper voice services and also promoting wireless options in areas with new government-subsidized towers. Our Fibre Boost upgrade in December drove a huge change in the speed profile of consumers.
Almost 70% of residential users went from 100 Mbps to 300 Mbps. We now have over 90% of our residential fibre consumers on speeds of 300 Mbps and over. We've continued to see strong demand for 1 gigabit services, which now represents 23% of residential connections, but also represents about 30% of net fibre adds. Hyperfibre connections are starting to come to get some traction, and I'll talk about that in more details later. Finally, business fibre connections grew by about 12%, and we estimate that about three-quarters of the business market, excluding small and home businesses, have now moved to fibre. The rise in data usage continues. This year, total network traffic grew by 23% or the equivalent of 1.3 billion GB.
As you can see from the chart on the left, most of this continues to be at peak time in the evening. Average peak time traffic in June was 3.3 Tbps, up 18% on June last year. Average monthly data usage for fiber users grew from 500 GB to 567 GB during the year. As this chart on the right shows, the average went over 600 GB during the COVID lockdowns in the first half. Uplink traffic has also grown as working from home and services like video conferencing have become commonplace. Our network and fiber uptake has proved resilient in an operationally challenging year, and that has underpinned the solid financial results that Andrew will now take us through.
Thanks, JB. Good morning, everyone. This slide is an overview of our earnings result. It features growth in revenues, careful cost management with a resulting EBITDA of NZD 675 million, up NZD 18 million on FY 2021. It is worth noting that there are some one-offs in the mix, which I'll cover in the next slide. The purpose of this slide is to provide a view of underlying EBITDA. Excluding one-off items, underlying EBITDA was NZD 660 million relative to NZD 657 million in FY 2021 on a restated basis. In terms of the one-offs, they're exactly the same as David described in the half year. The only change on this slide relative to the half year presentation is the nature of the restatement from a half year to a full year.
Revenues of NZD 965 million were up NZD 10 million versus FY 2021. While this has some one-off items in the mix, the result does reflect underlying revenue growth. I think this is a pretty significant milestone for Chorus. This is the first result featuring revenue growth, albeit modest, since 2017. Fiber growth reflects fiber uptake and the proportion of customers on higher speed plans. GPON ARPU is up to NZD 50.67 from NZD 49.87 in June. The trend of declining copper revenues continues as fiber uptake grows. We also had a copper CPI increase of 4.93% flowing through the numbers which applied from mid-December. There are a few specific call-outs in field services revenues. Greenfields were NZD 29 million and roadworks, NZD 10 million. The slide on expenses covers off our key cost line items.
In terms of quick call-outs, labor costs are down NZD 10 million, reflecting the release of a NZD 9 million holiday pay provision and some offsetting inefficiency through COVID, where labor costs that would typically be capitalized or expensed. Full-time employees were down to 799 from 817 over the period. Maintenance is down NZD 4 million. That continues historical trends as fibre grows and copper connections reduce. COVID lockdowns also provided a benefit by reducing network activity or hands in the network, and the appendix to this document provides a breakdown of those costs by zone and type. Gross CapEx for the year was NZD 492 million, down NZD 180 million on the previous year. UFB communal is trending down as we near the end of the rollout. Installations and layer two spend were affected by COVID, as JB mentioned earlier.
We completed only 117,000 connections, down from 172,000 in FY 2021. Cost per premises connected is at the lower end of guidance for UFB2 and just below for UFB1. Greenfield spend was up a touch relative to FY 2021, and customer retention costs reduced slightly due to COVID impacts. Moving to copper and common CapEx. Copper CapEx continues to reduce in line with connections and our focus on optimization. Common CapEx was lower, and we did have some planned building projects delayed by COVID. Financing. Crown financing now is 94% drawn, and our next refinancing event is the NZD 785 million New Zealand dollar euro bond, which matures in October next year.
Net debt to EBITDA has reduced from 4.24 at the end of FY 2021 to 4.08x , reflecting the higher EBITDA and a reduction in the lease liability of NZD 77 million we talked about at the half year. We obviously sit comfortably below the revised rating thresholds. Moving to dividends. We are confirming a final FY 2022 dividend of NZD 0.21 per share and imputed. As JB mentioned, that brings the total dividend payout for FY 2022 to NZD 0.35 per share. As we've noted previously, future dividends will be unimputed for the short to medium term. The DRP will be available at zero discount. Reflecting our positive free cash flow and the significant headroom available, we are increasing dividend guidance.
FY 2023 dividend guidance is 42.5 cents per share, up from a minimum of 40 cents per share. FY 2024 guidance has increased to a minimum of 47.5 cents per share, up from a minimum of 45 cents per share. This FY 2023 and 2024 payout profile is consistent with our dividend policy of planning to pay out 60%-80% of free cash flow. Our share buyback remains in place and is now 25% complete. Moving on to guidance. Our FY 2023 EBITDA guidance is NZD 655-NZD 675 million. This compares to underlying FY 2022 EBITDA of NZD 660 million. Our objective of modest EBITDA growth remains. FY 2023 CapEx guidance is in the range of NZD 410-NZD 450 million.
UFB2 completion is imminent, and we're forecasting installations in the range of 90-110,000 relative to actual. So that continues that tapering trend of volumes as uptake increases. FFLAS revenue for those that like regulatory detail here are indicative regulated revenue numbers for FY 2022. Around two-thirds of our revenues are regulated fiber revenues. Just a quick reminder that capital contributions, mostly MPD, are netted off the rev for regulatory purposes, so not included in FFLAS revenue. We continue to expect to be under the MAR in calendar year 2022 and for RP1. Regulatory outlook. This is the final slide for me. We are expecting confirmation of our final rev post true-up in the coming months.
The balance of the slide is a reminder of the items we have highlighted previously that are likely to be relevant for RP2. Back to you. Thanks, JB.
Thank you, Andrew. It really looks like you've done this before. As the slide shows, FY 2022 was a crossroads year for Chorus. With key elements of our regulatory framework now settled, our focus now really shifts to a more operational future. We've refreshed our company purpose and our strategy, and this involved getting input from a range of internal and external stakeholders, including investors. As the slide shows, our new purpose is connecting Aotearoa so that we can all live, learn, work, and play. Achieving this means continuing to grow uptake of our networks, so its socioeconomic benefits help power the digital future of New Zealand.
There are three pillars to our strategy, all of which should be familiar from last year, but with some changes in each of them, and I'll talk through some of these in more details in a minute. In our most important pillar, winning in core fiber, the focus remains on increasing take-up, delivering great customer experience, and leveraging our new regulatory framework to benefit all stakeholders. Around these strategic pillars are other focus areas, such as building an adaptive, diverse and inclusive organization and growing the sustainability practices that are increasingly part of the way we operate. Employee engagement remains high at 8.5 out of 10, and we've made progress in areas such as diversity and gender pay gap, but there's plenty more that we can and are doing. Our primary strategic focus remains winning in core fiber.
Each year that goes by, we are ever more confident that fiber is the right technology choice for consumers now and well into the future. We're not alone in that view. OECD data shows how much fiber is growing. In fact, it has overtaken cable subscription for the first time this year. The US government has also explicitly stated its preference for fiber in the guidelines for its multi-billion dollar broadband infrastructure funding. They recognize that fiber is best placed to ensure that faster speeds can continue to meet growing connectivity needs. After we boosted our 100 megabit services to 300 megabits in December, we've seen New Zealand jump up the global broadband rankings. Just this month, we've in fact reached tenth place in the Ookla global table.
Consumer and business data consumption continues to grow, and broadband that is considered good enough today won't deliver a great experience in a few years. The Commerce Commission's independent monitoring is very helpful in highlighting the high speed and low latency benefits of fiber relative to other technologies. This is important for real-time applications like interactive web pages and video calling. As data usage keeps growing, network and individual line capacity becomes even more important. With more people streaming video content, we're in fact already seeing an uplift in the number of what we call power users. It's about 15% of our fiber connections that today already use more than 1,000 GB every month. In fact, we're forecasting that 1,000 GB will become the average by 2025, and that will grow to 4,000 GB by 2033.
Now, some of you might think that this is really high, but as a comparison, in the US with AT&T, they already estimate that their average usage is 900 GB per month today, and they forecast that it will be at 4,000 by 2025, and that is the drive for their program of deploying fiber. More data hungry devices in the home, higher spec content like live sports in 4K quality, cloud-based gaming, the metaverse, augmented and virtual reality, all of this contributes to sustained growth in data demand. When you have multiple people in one place trying to do these things at the same time, you do need the burst capacity of a gigabit service or better. That's why for example, we're seeing schools start to use our multi-gigabit Hyperfibre services to deal with the demands of multiple students online.
This slide shows our updated product lineup, starting with our new Home Fibre Starter, 50 Mbps product. The wholesale price of it is capped at NZD 38 if retailers sell it for NZD 60 or less, so it helps fill a need for basic entry-level product. As I mentioned earlier, our Fibre Boost in December lifted most consumers from 100 Mbps to 300 Mbps. 1 Gig uptakes continues to grow and our Hyperfibre speeds are the next growth area. Just a few months ago, we trialed 25 gigabit technology, which is delivered on the existing Fibre alongside our existing services. It really demonstrates how Fibre is the most cost-effective and scalable technology. This need for higher speed and reliability is not limited to large urban areas. People in smaller communities also see value in Fibre.
The chart on the right shows how the rollout of fiber, marked by the dotted green line, has provided a boost to fixed broadband connection in those communities after a prior period of decline. That's possibly because consumers had been persuaded to try other networks before fiber was made available. We've also seen some significant market changes this year. Mercury Energy has just joined other electricity retailers such as Nova and Contact in bundling broadband services. This follows Mercury's acquisition of the retail business of Trustpower. The combined Mercury entity has almost 600,000 electricity customers. That extend the reach of the non-traditional telcos, including Sky TV, to about 80% of New Zealand homes. Another change were clearly the merger of Vocus and 2degrees, and this means now that the three largest traditional telco retailers have fixed wireless alternative.
Diversification in the retail market is important to help offset some of the competitive imbalance that is created by this vertical integration. The continued growth in fiber take-up shows that we continue to be successful in promoting fiber. The fact that over 90% of our fiber consumers are on speeds of 300 Mbps and over maintains a material performance advantage over the other technologies. As the chart shows, non-traditional retailers have been particularly successful in growing their market share with high-speed services, 1 Gbps. As fiber uptake passes 80% and eventually slows in our UFB areas, greenfields will become a larger part of our ongoing connection program. New property orders are at their highest ever, and we've put a lot of effort into our systems and processes to help support this pipeline.
As you can see from the Stats NZ chart on the right, most of this demand is coming out of the Auckland region. Completed orders were slightly lower than last year, and that reflects the impact that COVID has had on our workforce and probably also on the developers, but new property development remains a key priority. Another growing source of fiber connections comes from our second strategic pillar, which is optimizing our non-fiber assets. We've talked before about trialing our copper withdrawal program, and after some delays due to COVID, we've now moved into a regular cycle of activity. We have now issued just over 13,000 withdrawal notifications to consumers, and about 7,000 consumers have ended their copper service. That's meant we can close 130 cabinets, and we have another 456 cabinets under notification.
As we withdraw copper services, we've seen a 90% broadband retention rate on fiber across the closed cabinets so far, which is a very, very pleasing result. That's given us the confidence to start shifting from our general managed installation program to one that focuses on assisting customers to migrate to fiber as we withdraw copper services in our fiber footprint. Another component of this pillar is optimizing our property assets. Our site optimization program also continues. We have 15 properties now in subdivision phase, and we have over 100 other sites that are in our program. We also expect to continue reducing our reliance on leased space in Spark's exchange. Our third strategic pillar is to grow new regulated and unregulated revenues, and this is getting a lot more focus now that the UFB build is almost behind us.
In regulated new revenues, we've now passed 1,000 Hyperfibre connections. The majority of these are residential customers, and these services are also becoming more widely overseas. We expect that the uptake will follow a similar path to our 1 Gig services. In fact, we've revised our pricing to help drive this and hope to see more retailers offer Hyperfibre as the service evolves. We're also seeing significant growth in our small business fiber products. In the unregulated revenues, we continue to see encouraging signs in our EdgeCentre services. This is an opportunity to leverage our exchange buildings as secure spaces for computing capacity. Our plans to develop further sites were a bit slowed by the COVID in FY 2022, but we still doubled revenues in the year.
There is a lot happening with large data center development and we're not competing with these. Our service is, in fact, complementary offering in the regional and suburban space. Finally, Power Sense is another exciting new product to come out of our innovation program. The service can detect when clusters of fiber terminals lose power at the same time, indicating a likely local power failure. We share that with the electricity line companies who can then use that data to identify faster the geographic impact of power outages and then support faster service restoration. An increasingly recognized characteristic of fiber is its green credentials. As consumers migrate from copper to fiber, we reduce our electricity consumption and our related carbon emissions. We've committed to a new science-based target of 62% reduction in our scope one and two emissions by 2030 compared to 2020.
This is possible because fiber broadband requires less powered equipment than other technologies. As efficiency increases with faster broadband speeds. That's why we've been able to absorb significant growth in data traffic without equivalent electricity consumption growth. Fiber is in fact the only technology that can cope with higher speeds without increasing emissions. Our second sustainability report was published today and contains a lot more data on a range of sustainability topics, including this and also our focus on digital inclusion. As we look at the year ahead, our focus is very much on continuing to grow uptake on our network. That's how we'll grow the socioeconomic benefits that will in turn power our authorized digital future. We believe we're providing consumers with the best broadband technology, and our data forecast tells us that we're well-placed into the future.
There are about 160,000 consumers who could switch on fiber in their home or their business today, and there is another 250,000 who have fiber at their gate. That's why we need to keep refining our value proposition and making the customer experience as seamless as possible. Especially when we expect COVID and the global environment to keep providing challenges at both an operational and cost level for our workforce and the wider economy. As demand grows, there is a renewed case for further increasing the reach of the fiber beyond the 87% current footprint. Other countries are going further because they recognize the need for fiber rather than solutions that require ongoing investments to keep up with demand.
We believe that pragmatic regulatory and policy solutions could help us take fiber to another 3% of Kiwis, towards reaching 90% with fiber coverage. If we're serious about digital equity and sustainability for New Zealand, we do need to work together to try to get to those results. That's it for us today, and I think I'm now gonna switch to Eddie for the questions.
Thank you, sir. Ladies and gentlemen, we will now begin the question and answer session. If you wish to queue for a question, please press zero followed by one on your telephone keypad and wait for your name to be announced. That is zero followed by one on your telephone keypad. We will pause for a moment to assemble a queue. Your first question is from the line of Arie Dekker from Jarden. Please go ahead. Thank you.
Morning, gentlemen. Just on the dividend increase firstly, and you know, appreciate it's obviously, you know, relatively modest increase, but can you just sort of confirm that it's more reflective of your ongoing and then perhaps increasing confidence in your post FY 2024 guidance, where you've talked to 60%-80% of free cash flow than it is sort of a little bit of capital management given the buyback slowdown or the fact that you've got sort of lower CapEx in FY 2022?
Sorry, Arie. We lost you a little bit at the end, but I think we got the essence of it. Yes, it does reflect yeah the cash flow position and where we sit relative to rating thresholds. As I say, it's a modest increase and consistent with the guidance that David talked to earlier this year.
Sure. Just an update. I mean, you've used consistent language short to medium term on the imputation credits. I mean, you know, I guess the bit I don't quite understand about, you know, that is what would the swing factor be to make it short, you know? Like, would short be, is that 2-3 years, whereas medium term, sort of 5+ years? What would sort of be the unknown to, in that short to medium term range?
Yeah. I don't think we're gonna try and be more precise, Arie, around short to medium term. I mean, there are a few factors in the mix, including future regulatory settings. We're not going to try and be more precise at this stage.
Sure. Okay, thanks. Just turning to the regulatory disclosure. You have previously provided indicative FFLAS OPEX, which I guess has been sort of useful to sort of look at what the non-FFLAS earnings are. It looks like you've sort of excluded it this time round. Can you give an indication of what the FFLAS OPEX was, why you excluded it? Then just a little bit on the non-FFLAS earnings profile in 2022 versus 2021.
Sure, Arie. I mean, as you'll be aware, we are still working through the RAB trial process with the Commission. We've decided to hold on any OpEx updates as a consequence. You've got the revenue story, but not an updated OpEx view.
Okay, more visibility on that as you come through that finalization.
Yeah. There might be someone else in this chair at that point, Arie, so you can speak to them about that math.
Just on the cost allocations. I mean, you make a reference to those needing to be addressed in RP2 or reflected in the policy framework for copper TSO. Can you, I guess just sort of give any indication of like when you're looking to, you know, the RP1 is only a three-year period. You know, when you're looking to progress things on the policy framework for copper TSO and, you know, is that gonna be with government, industry? You know, what sort of when can we expect to see a bit more detail on where that's sitting?
Yeah. I'll let Andrew talk about the timing of when we'll make the RP2 submissions, 'cause there's a clear timing there. On the TSO, let me just say that, you know, the thing that we're voicing is the fact that longer term, a standalone TSO policy is unlikely to deliver the right solutions for rural and regional New Zealand in particular. What we're encouraging is a dialogue with multiple parties, the regulator, the policymakers, but also the rest of the industry, to make sure that we do collectively come up with solutions that do provide the right connectivity to rural and regional New Zealand. We believe that there is room for further fiber coverage under the right reg and policy settings.
We also believe that we need to work better with the rest of the industries, the retail service providers, the WISPs, to make sure that we do come up with solutions that do satisfy the long-term connectivity of rural and regional New Zealand, because a pure reliance on TSO copper services won't do that.
In terms of the RP2 process, Arie, I think that's, you know, that's well-known, so there's a process that takes us through to October next year.
Yeah. No, no, I understand what that is. I wasn't sort of looking for that to be clarified. Just JB on follow-up, just on the TSO policy work. I mean, are you finding that you're getting a good reception on the need for that from industry and government? I guess if you're not, you know, I guess on the user advocacy sort of side, you know, are there parties there that you can partner with to progress this?
It's early days, but yes, we've started those conversations with a number of stakeholders. As you say, they cover the rest of the industry, the policymakers, the regulators, and also consumer advocates.
Great. Then just a final question on this cost stream. I guess when you sort of look at where the base cost load is at the moment in the business, you know, just with the build completing, you know, and regulatory settings, you know, broadly finalized, I mean, there's still you know, ongoing stuff. I mean, what's sort of the expectation for the cost track over the next sort of two, three years? Do you think there is. I mean, obviously you're fighting quite high inflation, but do you sort of see the cost base and absolute levels being sort of held, or do you sort of see scope for that to come down? And if so, you know, what sort of levels over, say, two or three years?
Yes. I'm not gonna provide multi-year cost guidance, Arie, but I think you can expect to see a continuation of recent trends. You know, the copper fiber mix, how that flows through maintenance. Yes, there are some cost line items where there's pretty standard inflation that flows through. You know, in terms of what we're looking at for FY 2023, we're seeing both revenue and cost growth. That's the basis for the guidance that we've provided.
Sure. Just a last one from me. Just the CapEx guidance, I think includes allowance for 90,000-110,000 connections. You know, I guess at the lower end, that's sort of consistent with COVID impact at 2022. Is the confidence to sort of connect in that sort of range, you know, given where penetration's reaching, is that sort of, I guess, reflect the fact that, you know, there was a meaningful impact in 2022 from COVID?
Yes. We've got a growing copper withdrawal program, which obviously feeds the fiber installation engine, Arie.
Yeah.
You know, we've got a good degree of confidence around that range based on what we can see today.
Yeah. Just to follow up on that. I mean, that.
Yeah. Sorry, Arie, I was just gonna say, if you look at the penetration numbers, you know, despite the disruption in COVID, the fact that we've continuously grown upticks through the year, another 4% overall, you know, the fact that Auckland itself is getting to 79%, will crack 80% probably this quarter or the next one, shows that there is still some good growth in our UFB footprint, that will fuel that CapEx assumption.
Sure. Yeah, just follow up, Andrew, just that, I mean that 90% retention on fiber broadband from the disconnect's obviously really good. Can you just give some color on how many connections that related to? And then also, to your point, what sort of level of copper withdrawal should we expect in FY 2023?
It's 90% of the numbers that Ari and JB talked to.
Which is about 7,000.
Yeah.
Copper disconnection as part of our disconnection program.
Yeah. A chunk of those that are broadband. You know, we do have a significant increase in plan for this year, and we're targeting slightly different things. You know, last year was a trial. Now we're beginning to get to BAU volumes.
Great. Thanks. Thanks for such a clear presentation.
Thank you, Arie.
Thank you. Your next question is from the line of Phil Campbell from UBS. Please go ahead. Thank you.
Morning, Andrew and JB. Just a couple of questions from me. The first one was just, are you able to talk a little bit about the buyback? Obviously, you've done 25%, but most of that was done kind of when the share price was NZD 7 or lower, and obviously it's a lot higher now. Just interested your views on kind of the outlook for the buyback going forward and whether there's any, you know, potential shift from the buyback to maybe some other way of capital management. Then the second question was just on, JB, just on your views on the kind of rural strategy. We talked a little bit about obviously trying to extend UFB, but there was about 170,000 lines, I think, which are in rural.
Just be interested to see what the plan is there. Obviously, we've got wireless broadband intensification there, but also, you know, Starlink's becoming a lot more visible as well, putting up quite a lot of satellites. Just be interested in your views on the rural kind of strategy for Chorus.
Right. Thanks, Phil. I'll have a go at the share buyback. Yes, it is still our plan to complete that program. We have been out of market for a wee while because we've had RAB processes and then full year results. You know, ultimately it is shareholders' money, and we think this is, you know, the most efficient way to return it. Yes, we still plan to complete the program.
Okay. On the rural strategy, as you say, there's about 170,000 lines in the footprint currently, with a slow decline there. We said that we think that it's definitely under the right settings, reachable to add another 3% to that. You can do the math. That's, I think, about another 30,000, just under 30,000 customers that we would put to the footprint for fiber. There is potentially room beyond that, but that would require significant support from the government. We see that happening in other geographies in Europe in particular. They've started to set targets that are above 90%. We think it's time to have that conversation.
To your question about satellite, yes, we do see those services starting to appear. The cost of those are still quite expensive in terms of setup and then ongoing monthly fee. We do think that ultimately they are part of the long-term solution for rural and regional New Zealand. You know, ultimately a copper line ADSL will not provide the needs of a rural and regional property that needs good connectivity. We do want that conversation with the industry, with the mobile operators, with the WISPs, with the satellite providers, to make sure that overall we do come up with an offering that will meet the long-term needs of rural and regional New Zealand.
Well, just a quick follow-up on that. Well, what's the kind of timeframe do you think? Obviously, we had a potential election, you know, election next year, like next year. You know, what would be the timeframe of these kind of discussions? Is it?
Although they'll definitely take time, because you know you don't change policy easily. You don't change regulatory settings easily. This is not something that we expect to happen over the next six months. It's something that will probably be a multi-year program.
Okay. All right. Thank you.
Just one point of clarification. Phil, 3% is about 65,000 premises.
Yeah, that's my dyslexia coming out.
Yeah. Yeah, I was gonna check on that. That's 65,000 kind of additional premises, right? If-
Yeah.
Were they included within that? Would they be included within this 170 or is that we're talking like?
Well, to go from.
They'd be included within that NZD 170, wouldn't they?
87%-90%, that's about 65,000 premises.
Yeah. Okay. Awesome. Thank you.
Thank you, Phil.
Thank you. Your next question is from the line of Brian Han from Morningstar. Please go ahead. Thank you.
Good morning, gentlemen. Just two questions for me. Firstly, the 2% reduction in staff numbers, can you please talk about whether that labor reconfiguration will continue over the next year, or do you think COVID and the tight labor market will reverse that trend? Secondly, JB, all the initiatives you have to reduce your footprint around the country, have you tried to estimate the market value or the properties and sites you're planning to exit?
Okay. I think on the staff numbers, you know, we are at the end of the rollout. That has an impact in terms of the resources that we need allocated to this. At the same time, we have now an ambition to grow revenue. You know, we'll continue to be as effective as we can in terms of the number of employees that we have on board. It's probably something that will start to taper down. Going forward, we'll need to figure out how that can continue to fuel the changing nature of what we do in the field, but also this ambition to grow new revenue.
On the property front, I don't know if we've got some high-level numbers, but you know, these are mostly real estate footprint.
High sites. I mean, that's a very broad spread right across New Zealand. We've probably picked out some of the juicier sites to exit first in the last financial year. I don't know that you can anticipate a repeat at scale. As I said, it's a real mix.
While you're there, Andrew, I noticed that you've broken out advertising expenses. Just wondering whether that NZD 10 million or NZD 11 million is the sustainable figure given what's going on with all the fixed wireless noise.
I'll take that one. You know, what we're doing now is encouraging and helping the first big one-off migration from copper to fiber. Once that starts plateauing, I would expect that, you know, we do not have to be as active in market to do so, and we become more in the mode of having really excellent customer services, really good product positioning so that customers remain on the fiber services. I would expect that ultimately the effort that you see us providing right now in terms of helping the remaining customers that are still on copper migrate to fiber should be reducing.
Great. Thank you.
Thank you. Your next question is from the line of Ian Martin from New Street Research. Please go ahead. Thank you.
Oh, thanks. Just a couple of questions if I could, just on the business part of the business revenue, business customers. If I had point-to-point with GPON, it's about 10% of fiber connections are business. Just wonder if you can tell me what part of the revenue is from those business users and where you think that can get to, and what part of that business service revenue. Is it all regulated revenue or is there some of that unregulated revenue?
I'll let Andrew maybe look at some of the numbers. Let me look. Let me make a high level comment. You know, with the emergence of our higher speed services, Hyperfibre service in particular, you know, we actually do believe that a number of customers will pick those services rather than point-to-point. For us, having main products both in our residential and business offering that starts getting to speed of 2, 8, 10, and then ultimately we'll get to the 25 gig trial service that I've mentioned. That is probably where we see the growth coming from rather than dedicated point-to-point. I don't know if you've got more details on the numbers.
Well, in terms of the numbers, you know, Fibre Premium is called out specifically, Ian, so that's the revenue line that revenue sits on.
That's predominantly business revenue, is it, that Fibre Premium?
A good chunk of it is, yes.
All right. Can I just ask about the discussions you're having to increase the fiber footprint from 87% to 90%? You know, pretty clearly you wouldn't do that at the kind of costs of capital in the regulatory framework, 4.5%, perhaps going up to 5.5%. Isn't the risk I mean, the risk profile's probably changed substantially from the original UFB build, given what we know now about take-up and connectivity and so on, but it is a potentially risky in terms of the kind of market you're expanding into. You might come to some agreement with government on that and then find yourself in the same situation where that agreement is retrospectively overturned by the regulator.
Isn't that the real risk, the substantial issue here, that you can't really rely on the regulatory framework to deliver what agreements you come to with government?
Well, I mean, you know, this is why we've said in the wording that it's under the proper regulatory and policy settings that we'd be able to do this. Clearly RP2 will change a lot of the regulatory setups, and we know that some of them will help us invest further in the fiber footprint as long as they do end up where we think they'll be. There are a number of building blocks that appear only in RP2 that were not in RP1 that will help to go along that way. You're correct. Ultimately, it's the combination of the policy settings and the regulatory settings that will potentially open the door for extending the fiber footprint.
Thanks, JB.
Thank you. Your next question is from the line of Aaron Ibbotson from Forsyth Barr. Please go ahead. Thank you.
Hi there. Good morning. I just had one quick question and maybe one clarification. First, on inflation. Is there any chance you can give us any idea of sort of what type of like for like, if you understand what I mean by that, labor inflation you're experiencing? Disregarding some obviously cost savings and managing expenses. Any chance you can sort of share with us what you're experiencing there?
I think it's consistent with most other large employers in New Zealand, Aaron.
Well, you see it's changing very quickly at the moment, and you're one of the first one out. I'm gathering data. What are most large New Zealand organization experiencing? That's what I wanna know.
Yeah. Well, I think it's, you know, it's CPI there or thereabouts.
Okay. Looked a bit lower than that to me, but that's good to know. Thank you. Finally, not sure how much you can share, but obviously with a switched focus to 5G from 4G when it comes to fixed wireless, I wanted to know if there was any sense from your side that you'd seen any increased competition or some even switching away from fiber or if that was still basically a moot point from your perspective.
No, from our perspective, we haven't seen it really shift the dial in terms of the competitive pressure. We're still, you know, securing the vast majority of consumers that migrate from copper, migrate away from copper, do end up on our fiber services. If you look at the numbers in terms of net broadband growth in the UFB footprint, it does show that we are performing well. The other big thing for us was what we did with the big Fiber Boost that we did in December.
Mm.
With 90% of our customers now on speeds of 300 Mbps and above, we really maintain a performance difference over other technologies. That is still, you know, helping us fuel the trend that we've seen of continuing growth in fibre uptake. The market share of fixed wireless continues to grow slowly, but it's totally within the predictions that we had. We estimate that it's probably around the 16% mark now. We'll continue to make sure that the take-up of fibre makes up for more than that.
Perfect. Thank you. That's all I had.
Thank you. Once again, ladies and gentlemen, that is zero followed by one on your telephone keypad to queue for a question. There are no further questions at this point. JB, please continue. Thank you.
Okay. Well, thank you very much again for joining us today. As we said as the opener, this was a challenging year, but through it, we did manage to deliver really strong results in terms of new fiber connections, continuing uptake. We now have the updated and refreshed strategy that really focuses our attention for the next, you know, five years going forward. Looking forward to updating you in six months. Cheers.