NAPCO (NSSC), Chorus (CHRYY): Carriers Set the Copper Shutoff Date

NAPCO Security Technologies (NSSC) and Chorus Limited (CHRYY) reported on 24 and 23 August 2026, on their respective fiscal 2026 full-year earnings calls, that sales of the wireless radios used to replace copper telephone lines grew 40% year over year [1], and that full copper network retirement has been pulled forward from 2030 to the end of 2028 [2].

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Regulators moved the copper shutoff date from the building owner to the carrier

In US and New Zealand commercial buildings, fire alarm panels, elevator emergency phones and some point-of-sale and ATM backup lines still send their signal over a pair of copper telephone wires. The industry calls this POTS, or plain old telephone service. The local carrier maintains that line, and until this year a carrier that wanted to shut it down had to apply to the regulator, while state and local rules could hold the process up.

Two regulators removed that constraint in 2026. On 26 March the US Federal Communications Commission adopted the Network and Services Modernization Order, which lets a carrier stop offering legacy voice and low-speed broadband to new customers on customer notice alone [4]. Only full discontinuance requires an application, which is automatically granted after a uniform 31 days, and state or local law may no longer restrict or delay a discontinuance that holds federal authorization [3]. New Zealand got there differently: on 30 June the Commerce Commission recorded that Starlink had taken 27% of the country's rural broadband connections, making it the largest rural provider, at peak-time download speeds around twenty times faster than basic copper [5]. The reason for holding the copper network open where fiber does not reach fell away.

Once the obligation is gone, the shutoff date is set by the carrier's own wire-center schedule. A fire alarm panel in an office building does not break on that date, but its signal no longer goes anywhere, so the property manager has to fit a cellular communicator before the date arrives. The choice narrows from whether to replace to what to replace it with.

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Carrier schedules, vendor units and the incumbent's released costs

AT&T has already turned regulatory permission into a specific wire-center schedule. In June 2026 it received approval to discontinue legacy copper voice at about 60% of its California wire centers, and holds approval covering over 30% of its wire centers nationwide, effective by late 2026. AT&T attributes the pace directly to the regulator, describing its work to exit inefficient copper-based services as accelerated by positive actions by the FCC [6].

NAPCO's replacement demand jumped this quarter, but the first thing the numbers show is margin compression. Fourth-quarter radio unit sales rose 40% year over year and nearly 30% sequentially, which management called among the highest growth rates in the company's history. Quarterly revenue was $55.8 million, up 10%, including $25.3 million of recurring service revenue at a 90.1% gross margin [1]. Management also explained that the radios themselves carry only about a 20% gross margin, so the more it ships the lower the blended equipment margin, and that NAPCO sells to distributors who hold stock for a month or two before dealers buy and activate it — a five to seven month gap between shipment and the service revenue [1].

Chorus is on the other side of the same transaction, and what it gets is released cost. It disconnected 48,000 copper lines over the year, leaving roughly 44,000 in service, nearly all in areas without fiber, and on that basis brought full retirement forward to the end of 2028. Over the same period truck rolls fell 23%, network maintenance costs came down by NZ$11 million, reactive fault spend by NZ$7 million, and copper assets are expected to be fully depreciated by 2028 [2].

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Orders arrive on the carrier's timetable, and the benefit lands several quarters later

With the timing in the carrier's hands, replacement equipment orders arrive in batches that follow wire-center schedules rather than whenever an owner decides to upgrade. For the vendor, the strongest quarter of the conversion shows up first as lower equipment gross margin, because the replacement radio is the lowest-margin item in the product line and the monthly service revenue it generates has to pass through a distributor and a dealer before it starts to book.

The sequence on the retiring side needs separating too. Copper connections in service fall first, the maintenance, truck-roll and depreciation relief follows, and the exit from exchanges and high-cost sites still has no number attached. Two things are checkable from here: whether the radios NAPCO shipped in the June 2026 quarter convert into recurring revenue around 2027, against an annualized recurring revenue run rate of roughly $103 million today [1]; and whether Chorus puts a figure on the exchange and high-cost-site exit at its February 2027 half-year result [2].

NAPCO itself does not tie the quarter to regulation. The cause it gives is a standing condition — over 2 million buildings still need to convert — introduced with the phrase "As I have stated before" [1]. Connecting the unit step-change to the 2026 rule change rests on AT&T's record, not NAPCO's. Because the two disclosing companies sit on opposite ends of the same transaction, anyone reading copper retirement as a single directional trade will get one end wrong.

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Companies exposed to the same change

• Ooma, Inc. (OOMA): Sells AirDial, a managed replacement service for copper telephone lines, into the same population of alarm, elevator and payment endpoints, and sits at the same point in the replacement chain as NAPCO; as carrier schedules advance it takes orders from the same pool [7].
• Alarm.com Holdings (ALRM): Launched a commercial fire communicator in Q2 2026 into the same replacement pool as NAPCO, sizing the opportunity at 4 to 5 million fire panels in the US and Canada; the trigger it names is cellular network retirement rather than copper, which also makes it a boundary on this mechanism [8].
• Lumen Technologies (LUMN): A US fixed-line carrier in the same position as Chorus, and it has announced the end of sale of enterprise voice products; whether it can turn copper maintenance, depreciation and scrap into visible numbers has not been disclosed [9].

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Sources

[1] Drillr · NAPCO Security Technologies (NSSC) · 2026-08-24 · earnings call

"1 number I want you to take away from this call is this, sales of radio units in the fourth quarter grew 40% year over year and nearly 30% sequentially. This is among the highest growth rates in NAPCO's history. Radio sold today become recurring revenue tomorrow. So that figure says a great deal about the quality of the year ahead."

[2] Drillr · Chorus Limited (CHRYY) · 2026-08-23 · earnings call

[3] RCN Technologies · FCC Adopts Network and Services Modernization Order Streamlining POTS Replacement Rules · 2026-03-27 · regulatory analysis · https://rcntechnologies.com/fcc-network-services-modernization-order-pots-replacement-rules/

[4] Broadband Breakfast · FCC Adopts Copper Retirement, Call Center Onshoring Orders · 2026-03-26 · news report · https://broadbandbreakfast.com/fcc-adopts-copper-retirement-call-center-onshoring-orders/

[5] New Zealand Commerce Commission · Rural connectivity: a market reset in motion · 2026-06-30 · regulator release · https://www.comcom.govt.nz/news-and-media/news-and-events/2026/rural-connectivity-a-market-reset-in-motion/

[6] Drillr · AT&T Inc. (T) · 2026-07-22 · earnings call

[7] Drillr · Ooma, Inc. (OOMA) · 2026-05-26 · earnings call

[8] Drillr · Alarm.com Holdings (ALRM) · 2026-08-06 · earnings call

[9] Drillr · Lumen Technologies (LUMN) · 2026-08-04 · earnings call

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