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Spark to Splash $221M on Data Centers, 5G in New Plan

New Zealand's largest telco, Spark, sees growth from data center demand and convergence as it unveils its latest three-year strategy. Spark believes local data center capacity will grow at more than 40% CAGR by 2026.

New Zealand's biggest telco Spark will invest up to 350 million New Zealand dollars (US$221 million) in data centers and mobile in its latest three-year strategy. It has set aside between NZ$250 million ($156 million) and NZ$300 million ($188 million) to expand data center capacity and another NZ$40 million ($25 million) to NZ$60 million ($38 million) to tip into 5G standalone and multi-access edge.

Unveiling the new strategy at a briefing Wednesday, chair Justine Smyth said Spark has built growth in the last three years through new technology and simplification, and is now able to invest for future expansion.

The new capex program will be funded by the proceeds of the NZ$911 million ($570 million) sale of 70% of Spark's mobile towers last year.

Based on surveys of its own customers, Spark believes local data center capacity will grow at more than 40% CAGR from around 50MW today to 200MW by 2026. "We still see data center growth as a big high-growth opportunity," COO Mark Beder said. "This is an investment that delivers a long-term, high-margin, high-revenue business for us."

He said the 11MW Takanini data center in Auckland will be completed in the middle of this year. Beyond that the new funding would allow the company to add up to 17MW in extra capacity that would likely come online in 2026.

Acceleration of convergence

Besides the ramp-up in data centers, Spark also spies opportunity in mobile where it is posting annual growth at 5.5% ahead of the market average of 4.6%. "In the next three years we will leverage convergence for growth," Beder said.


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