Optus announces AU$227m quarterly net profit

Optus has published its results for the last quarter of the 2015 calendar year, reporting a rise in net profit of AU$19 million, or 9.1 percent, to AU$227 million in total.

The telecommunications provider's operating revenue was AU$2.43 billion for the quarter ending December 31, up 6.3 percent year on year from the AU$2.29 billion recorded during the 2014 December quarter. For the nine months to December 31, operating revenue was AU$7.04 billion, up 8.2 percent from the AU$6.51 billion in the same period a year earlier.

Earnings before interest, tax, depreciation, and amortisation (EBITDA) was AU$685 million, up AU$33 million or 5.1 percent from the AU$652 million announced in December 2014, which the telco attributed to growth in mobile and National Broadband Network (NBN) payments, as well as increased uptake of device repayment plans.

Free cash flow, on the other hand, plummeted by 52.1 percent year on year, from AU$306 million down to just AU$147 million.

Optus CEO Allen Lew attributed this loss in cash to continuing investments in the network, which is due to continue.

"In the coming quarter, Optus will continue to strengthen and extend the reach of its 4G Plus network as it increases deployment across its 700MHz and 2600MHz spectrum holdings," Lew said.

"Following its recent acquisition of regional 1800MHz spectrum, Optus now has more spectrum assets to expand its network and improve its 4G coverage for more Australians."

Last week, the Australian Communications and Media Authority (ACMA) announced the results of its 1800MHz spectrum auction, with Optus spending and acquiring the most, at AU$196 million, followed by Telstra, at AU$191 million; TPG, at AU$88 million; and Vodafone Australia, at AU$68 million.

The high-band spectrum online auction, which began in November, will improve 4G coverage in regional and remote Australia, bringing high-speed broadband to those living outside of the major cities.

"When combined with our existing assets, this additional spectrum allows Optus to support Australia's growing demand for data services in regional Australia," Lew said.

"Giving more retail and business customers access to super-fast 4G in more places underpins our strategy to be a mobile-led entertainment company. The use of common frequencies between metropolitan and regional areas will help reduce dead zones across urban and rural boundaries, and give customers a seamless 4G experience when they're on the go."

Optus' total mobile service revenue was up 1 percent year on year, to AU$1.24 billion. Revenue for mobile equipment rose by AU$79 million, to AU$371 million; revenue for mobile incoming service fell by AU$12 million, to AU$241 million; and revenue for mobile outgoing service was AU$935, up AU$23 million from the same period a year earlier.

Optus lost 26,000 mobile post-paid handset customers over the quarter due to "the deactivation of a wholesale customer" -- likely TPG -- but gained 61,000 prepaid handset customers, with total 4G customers up 314,000 quarter on quarter, to 4.45 million. Its 4G mobile services now have a 47 percent penetration rate.

Post-paid average revenue per user (ARPU) was down 2 percent to AU$61. Prepaid ARPU, on the other hand, rose by 3 percent to AU$28.

Revenue for Optus' fixed-line consumer business amounted to AU$467 million -- including AU$28 million in NBN migration and preparation revenue -- up 3.8 percent from the AU$450 million announced for the same period in 2014. Mass market fixed line saw operating revenue grow by 6 percent thanks to growth in its NBN customer base and improved uptake of Optus TV.

Optus recorded that as of the end of December, it had 433,000 hybrid fibre-coaxial (HFC) customers; 491,000 ULL broadband customers; 88,000 NBN customers; and 32,000 other fixed-line customers. Broadband ARPU was down 2 percent year on year, to AU$53.

Enterprise revenue grew by 10 percent, from AU$379 million up to AU$416 million.

Earlier this week, it was revealed that Optus has retained the highest complaints ratio for all Australian telcos, having received 5.9 complaints per 10,000 services in operation for the October to December quarter -- a year-on-year rise of 9.3 percent, though an 11.9 percent decrease from the previous quarter.

Optus' parent company Singtel also announced its results for the December quarter on Friday, reporting a net profit of SG$954 million on revenues of SG$4.47 billion.