Optus loses customers amid 4G growth

Summary:Despite the continuing exodus of customers from rival Vodafone, Optus too is experiencing a drop in the number of mobile customers on its network.

Optus' total number of mobile customers has dropped by 38,000 in the last three months alone, and 49,000 in the last six months, according to results out from parent company SingTel.

While Optus' rival Vodafone continues to shed customers at a rate of around 600,000 in the three months to September 30, Optus has not been able to capitalise on Vodafone's misfortune, as the company finds itself recording a decline in total mobile customer base from 9.533 million as of the end of June, down to 9.495 million at the end of September.

The company lost 20,000 prepaid customers, and 18,000 postpaid customers, according to the results, but the telco said that the churn rate was down, going to 1.3 percent at the end of September, from 1.5 percent at the end of June.

Included in the total number of subscribers is 1.377 million 4G handset customers, up 293,000 in three months from 1.084 million at the end of June. Optus is still not disclosing the total number of 4G mobile broadband devices it has sold.

Optus CEO Kevin Russell said that the decline in Optus' customer base, which includes wholesale customers, reflected the company backing off in its mobile broadband product.

"Unquestionably we have backed off the broadband wireless market and that's where the large part of that erosion is coming from. It is a temporary phase while we expand and strengthen the 4G capability," he said indicating Optus would push back into this market in 2014.

Optus also saw a massive increase in the acquisition cost for prepaid subscribers in the quarter, up from AU$10 per subscriber to AU$25 per subscriber. It was slightly down for postpaid customers at AU$224 per customer, from AU$225 per customer.

For the quarter, Optus' operating revenue declined 6.2 percent or AU$114 million from AU$1.8 billion to AU$1.7 billion, but EBITDA was up 15 percent to AU$587 million from AU$510 million.

Despite the decline in Optus' customer base, Russell said that the company had seen strong take-up of its new plans, and churn at Optus was the lowest level it had been in seven years.

Updated at 3:39pm AEST November 14, 2013: Added comment from Russell on subscriber numbers.

Topics: Optus, Australia, Telcos

About

Armed with a degree in Computer Science and a Masters in Journalism, Josh keeps a close eye on the telecommunications industry, the National Broadband Network, and all the goings on in government IT.

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