Optus profits up despite continued revenue fall

Optus profits up despite continued revenue fall

Summary: Singtel's Australian operation has reported a jump in profit to $AU597 million for the quarter to June 30, as revenue continued on its downward trajectory.

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TOPICS: Telcos, Optus, Australia
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Optus has increased its margins by 2 percent year-on-year, and taken its quarterly earnings before interest, tax, depreciation and amortisation (EBITDA) from AU$572 million at the this time last year, to AU$597 million. Underlying net profit for the company rose 12.3 percent to AU$187 million, while AU$24 million of exceptional items impacted net profit to create a 1.8 percent decline down to AU$164 million.

Despite the increased profitability, Optus experienced a fall in revenue of 2.8 percent to $2.061 billion for the quarter. The company said that fall was due to lower equipment sales and a change to Optus owned stores for consumers, as well as a mandated decrease in the mobile termination rate from 4.8 cents to 3.6 cents per minute from the start of the year. The company has grown its Optus-owned store network from 33 shops a year ago, to 160 stores today.

The company said it had increased its 4G customer base by 282,000 subscribers over the quarter, taking its 4G customer total to 2.43 million. With the addition of 700Mhz 4G pilots in Darwin and Perth, the company said it now offering 4G coverage to 78 percent of the metropolian population, as well as 58 percent in-building coverage, with 1,980 sites now using 4G.

"We're upgrading our entire mobile network in preparation for access to 700MHz spectrum in January 2015, putting us well on track to offer 4G national coverage that reaches 90 percent of the Australian population by the end of March 2015," said Optus country chief officer, Paul O'Sullivan.

Despite more than doubling its 4G customer base in the year to June 30, overall, the companies subscriber base fell by 1.3 percent year-on-year to 9.4 million, 5.4 million of whom are postpaid customers. Customers are leaving Optus' mobile broadband offering at a rate of knots, with the company experiencing a 11.5 percent loss against the same time last year, taking its mobile broadband base down to 1.3 million customers.

Optus' enterprise arm reflected the growth in profit and decrease in revenue seen throughout the results, with revenue down 3 percent to AU$367 million, and EBITDA up 2 percent to AU$71 million. During the quarter, Optus signed a five-year deal with Westpac that will see the telco provide the bank with its domestic mobile network and managed services.

Topics: Telcos, Optus, Australia

About

Chris started his journalistic adventure in 2006 as the Editor of Builder AU after originally joining CBS as a programmer. After a Canadian sojourn, he returned in 2011 as the Editor of TechRepublic Australia, and is now the Australian Editor of ZDNet.

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3 comments
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  • Optus Broadband

    Is anybody aware of the reason for such a sharp decline in broadband numbers?
    David Boyd
    • Cheaper Plans Elswhere

      Rather obvious I would suggest
      grump-a1eeb
  • Optus Broadband

    Price isn't always the motivator, customer service, billing accuracy and quality of service are also very important. 11.5% is a massive decline
    David Boyd