Optus defends Terria NBN bid

Summary:Despite the loss of several key industry partners and the economic downturn, Optus chief executive Paul O'Sullivan said today that the Terria consortium was ready to meet the requirements of the Federal Government's national broadband network (NBN) tender.

Despite the loss of several key industry partners and the economic downturn, Optus chief executive Paul O'Sullivan said today that the Terria consortium was ready to meet the requirements of the Federal Government's national broadband network (NBN) tender.

"We remain very committed to fulfilling the Government's requirements on coverage and speed at affordable prices with an open access model that gives equivalent access to all players," said O'Sullivan today during a financial results conference call.

Optus CEO Paul O'Sullivan

"Clearly in the economic environment today, there is a lot of pressure on both companies and governments to review their spend," he said. "The Government may well as see it important in terms of its stimulus in the economy if there is a slowdown."

Optus's continued commitment comes despite Terria's loss of several key partners, including AAPT, Sol-TPG and TransACT.

Criticism has also come from analyst firm IBRS, which claims the current economic climate has made the NBN unviable.

Optus also defended its iPhone subsidies, which had reduced the company's profit margins in its mobile division, causing a loss to date of $44 million.

"Although mobile margins are at 26 per cent due to the iPhone subsidies, if we adjust for the subsidies, our margins would have been 32 per cent," O'Sullivan.

The CEO said the new customers gained through iPhone sales, along with the additional spending of customers using the devices justified the subsidy.

"We are very confident, and very satisfied that the spend levels we are getting out of those customers more than justifies the extra expenditure," he said. "We are getting about one and half times the output out of [iPhone] customers."

Topics: NBN, Apple, Broadband, iPhone, Optus, Telcos

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