Optus defends Terria NBN bid

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.

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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, Telcos, Optus

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6 comments
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  • optus 26 - 32%

    "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.

    even at *26 per cent margin*, following subsidies, theyre still $44million in the red, here and dont forget another $27 million in the red in the homeland, singapore too.

    now did i hear someone mention an 18per cent roi for the multi billion dollar nbn, as greedy?
    anonymous
  • Dont point its rude.

    Now you've done it, Optus / Terria were just so so close to getting the $15 BILLION DOLLAR finance till you pointed that out.

    Good News,

    Remember Optus/Terria were AIMING for a returen just over the cost of money !
    Since the cost of money is rapidlydroping that can only mean Optus/Terria are dead cert to win !!!! NOT.

    When will the pathetic transparant farce of a pretence end !

    Not too much longer I'm betting, but amusing all the way to the very end.

    Oh look is that another memeber of Terria leaving . . .
    anonymous
  • Optus / Terria - "My Lord I have a cunning plan"

    You may scoff but Optus / Terria have a cunning plan.

    With all these Banks going broke there is a plethora of choice for Optus to buy a bank for a buck, and then, Voila, they lend themselves the $15 BILLION DOLLARS they need ! Actually they raid the bank vault and thereby give every poor consumer in australia a free broadband connection and ferrari each.

    Yeah Terria, Yeah Communism, Yeah Delusion.
    anonymous
  • Errr

    Errrr...
    The report says that there was a loss in profit magins from what would have been 32% to now 26%
    hence they have lost $44m from expected profit.
    Doesn't that mean that they are still in the black?
    just not as much as they hoped right?

    However they are taking this reduced income as an investment as the new ipod guys spend more in the long run...

    The same goes for the parent comany -SingTel-
    http://www.straitstimes.com/Breaking%2BNews/Singapore/Story/STIStory_301457.html?vgnmr=1

    Instead of making s$988m net profit they are making s$868m bummer.

    This would explain why they arnt stressed about it. -it's an calculated investment in getting more ipod customers who spend more-
    anonymous
  • @Errr

    Thats right they have plenty money to benevolently subsidise poor strugling australians with their broadband connections.

    If only Optus was intersted in gaining these customers themselves. But Selling to these poor people is so wrong. Instead its better that optus try to make Telstra lower its prices so they stay with Telstra !!!!

    Perveted Stupity Abounds.
    anonymous
  • @err

    i think you mean *der *andrew.

    the point you conveniently missed is, the 26% they made is still *8% greater * than the 18% people like you keep stating is too *greedy and monopolistic*, when telstra have bandied around possible nbn price figures.

    of course optus aren't stressed about it and nor should they be, they have captured a large share of the market (100K subscribers compared to telstras 90K). however, with the $44m carrot and the *unacceptable* ensuing added burden on their less than premium network, this should be stressing them, don't you think?

    P.S i have an optus mobile and haven't had any problems. but i'm not one who talks 24/7 on it.
    anonymous