O'Sullivan rates VHA a chance

Optus CEO Paul O'Sullivan said today that he believed the combined Vodafone-Hutchison entity would have a chance of overtaking Optus to nab the number two position in the mobile market.

Paul O'Sullivan, Optus CEO
(Credit: Optus)

"There's a clear ambition been stated by these people to become the number two," O'Sullivan said during a media briefing. "We think that that is a credible threat, but it's something now we're very focused on fighting."

O'Sullivan claimed that Optus had the edge over the new larger scale competitor because it had a larger customer base, more extensive 3G mobile coverage, a profitable business that would allow it to invest, and a fixed network with which to bundle and scale benefits from SingTel.

Optus was also poised to take advantage of any confusion and costs involved with integration of the operations. "The parties have committed to some fairly major restructuring inside their own companies; this will obviously lead to redundancies and rationalisation and various activities and that is obviously something we'd be seeking to capitalise on," he said.

The merger was a positive one for the industry, which previously had too many players, O'Sullivan said. He hoped it would put an end to "irrational" behaviour that had been going on such as providing free SIM cards in newspapers.

"Those are irrational acts and I think the industry will be a lot better off without the pressure that forced smaller operators to engage in that sort of behaviour," he said.

The fate of Optus' joint network venture with Vodafone has not yet been decided, O'Sullivan said, and was currently under review.

No hiring for Optus
Optus also revealed it has been in a staff freeze. "In respect of our head count we are managing our head count around essentially a staff freeze relation particularly to back-office staff," deputy CFO Murray King said. "We are still putting staff in front line operational areas such as in network operations and in customer care."

From the last quarter to this quarter, the head count has dropped by 101 from 10,740 to 10,639.

At the moment, O'Sullivan said there were no plans to make cuts. "We will have very detailed plans ready to go in the event that we see any change," he said.

National Broadband Network
O'Sullivan built on speculation that the National Broadband Network builder would be a consortium, saying that if needs be, Optus would work together with other bidders to deliver a project as long as the financial, investment protection and regulatory environment were right. "We're certainly ready to consider any alternative in that sense," he said. When asked if any talks had been held with other parties, O'Sullivan declined to comment.

As to the question of when Communications Minister Stephen Conroy might make a decision on who will build the network, O'Sullivan said: "I've got a bunch of guys with binoculars watching the chimneys of Parliament House for white smoke, so as soon as we see anything we'll let you know."