Its 2026 financial year was the first year without any integration costs since the 2022 deal that created the firm.

“There was a nice increase in operating cashflow. We grew across consumer, business, and wholesale, and again across all our product categories,” Callander told the Herald.

Competitor Spark continued to swing the axe in financial year 2025 (FY25), culling another 627 staff to take its headcount down to 3416.

Callander said 2degrees staff numbers were now around 1600, “down 80 or 90” over the previous year as systems were tweaked. “There’s been no restructure,” he said.

Early FY27 signs were promising. “It’s felt pretty good, the last six or eight weeks,” Callander said.

“We’ve had the Apple launch. And we’ve seen a lift in enterprise and business decision-making and a general uplift. We’re seeing slight tailwinds and hoping they’ll kick on through the year.”

No figures were given for each mobile segment. Callander said the consumer segment was still the largest, but that business had seen the highest percentage growth.

What’s ahead for FY27

There are two big items in 2degrees’ near future.

One is more or less in the bag: its satellite-to-mobile service in partnership with AST SpaceMobile, which will launch next year (Communications Minister Paul Goldsmith recently opened the ground station that 2degrees built for AST on a farm in Marton).

The service will compete against One NZ and Spark’s respective Starlink satellite-to-mobile services, which both fill mobile blackspots.

The other hangs in the balance: a proposal, currently before the Commerce Commission, to share mobile network electronics with One NZ (with the pair keeping their own wholesale agreements and spectrum).

“If approved, it will mean New Zealand will move from three to two radio networks, which will need to be considered carefully,” Spark chief executive Jolie Hodson said.

Capex savings – and a ‘big boy’ image

2Degrees’ financials show its capital expenditure fell $21m to $165.8m in FY26.

Forsyth Barr analyst Ben Crozier said that of that capex, probably around $50m of it goes to the mobile towers, “and that could be halved with sharing. That’s a meaningful saving”.

“And then there’s the argument that they’ve got this consumer perception, maybe more than anything, around network inferiority,” Crozier added.

“Now they can go out there and say they’ve got the exact same towers as the big boys. Their network’s exactly the same now.”

While 2degrees was far behind its rivals when it launched in 2009, it had achieved close to parity – but with many consumers giving it no credit, Crozier said.

The telco’s boss agreed.

“All our research shows the perception of our network is one of the main challenges that we need to address,” Callander said.

“We’ve tried to do that over the years through things like sharing how much we’ve invested in the network. We’ve done the blind network test; we’ve tried to move that perception needle as best we can.”

2degrees and One NZ hope their mobile partnership will get the green light in the first half of 2027. The Commerce Commission has put no timetable on its evaluation, which will include a round of submissions.

Fight the power

Callander said he was broadly happy with mobile market regulatory settings.

The power market was a different story.

In 2degrees’ Annual Update, published overnight, chairwoman Liz Coutts wrote that the telco’s “fighting for fair” challenger-brand ethos “includes the team’s growing focus on power, challenging the settings of New Zealand’s electricity market and advocating for a market that works better for consumers and businesses”.

2degrees bought power retailer Switch Utilities in 2015. The Electricity Authority says 2degrees Power, as it’s now called, has 56,618 customers via electricity being bundled with the telco’s mobile and broadband plans.

Callander is among those who would like to see the Government move to break up the gentailers – just as Telecom was split into wholesale (Chorus) and retail (Spark) operations.

“My personal view is that I don’t think structural separation is necessary,” the CEO told the Herald.

“But operational separation would be a good step in the right direction.”

Before the Government split Telecom into two separate companies, it “operationally” separated Chorus in an arrangement designed to see all internet service providers offered wholesale plans on the same terms.

How others are faring

Spark reported an FY26 net profit that fell 0.9% to $225m (adjusted for the impact of the sale of 70% of the telco’s data centre business and other one-offs).

Adjusted earnings before interest, taxes, depreciation and amortisation (ebitda) fell 2.4% to $1.04b.

Adjusted revenue was flat at $3.7b.

A previously flagged reset saw its dividend slashed to 16c per share (cps).

Its FY27 forecast was also flat.

Chorus saw its FY26 net profit jump from the year-ago $4m to $37m as revenue edged up 1% to $1.03b.

The UFB operator’s full-year dividend, which has been swelling in its less capital-intensive post-fibre rollout era, was 60cps.

Infratil-owned One NZ reported FY26 earnings before interest, tax, depreciation, amortisation and fair value adjustments (ebitdaf) of $607.4m, from the year-ago $604.0m.

Infratil forecasts One NZ ebitdaf of between $600m and $640m for FY27.

Not your father’s 2degrees

A complex 2022 transaction saw Australian telco Vocus sell its New Zealand business (which included Orcon, CallPlus, Slingshot, Flip, 2Talk and wholesale operations including satellite ground stations, fibre networks and data centres).

The buyer was Voyage (not to be confused with Seeby Woodhouse’s Voyager), a joint venture between Australian investment bank Macquarie and Australia’s largest superannuation fund, Aware Super, created specifically for the transaction.

Voyage, in turn, bought 2degrees. It then (stay with me) merged Vocus NZ (trading as Orcon Group) and 2degrees into the entity that today trades as 2degrees. Vocus executive Callander took the reins.

2degrees financial year 2026

2degrees said in notes with its annual update: “Trading ebitda excludes interest, depreciation, amortisation, financing and valuation movements, exceptional and integration costs, and other non-operating items.

Trading ebitida margin = Trading ebitda as a percentage of statutory revenue. Capital expenditure and capital intensity exclude spectrum. Communications Minister Paul Goldsmith recently said 5G spectrum clawed back from rivals would be sold to 2degrees at a set rate, irking One NZ and Spark. Goldsmith pitched it as a move to increase competition.

Chris Keall is an Auckland-based member of the Herald’s business team. He joined the Herald in 2018 and is the technology editor and a senior business writer.