Optus adds 'record' 127k mobile customers

Optus has announced net profit of AU$262 million for the quarter on revenue of AU$2.33 billion, with the telco attributing this to the addition of 127,000 post-paid mobile customers.
Written by Corinne Reichert, Contributor

Optus has reported "record" growth of its mobile customer base, with 127,000 post-paid customers added during the three months to December.

During the same time, it lost 29,000 prepaid customers for a total addition of 98,000 mobile customers for the quarter, which Optus said was due to its "focus on acquiring quality customers".

Optus brought in AU$1.43 billion in mobile revenue, up 6.1 percent from the AU$1.35 billion recorded in the same period last year, adding that it deployed 100 new mobile sites in the reporting period. Optus' 4G network now covers 96.6 percent of the population, with 5,550 of its 6,583 4G sites upgraded to 700MHz spectrum.

Optus also pointed towards its spectrum acquisitions in December, where it spent AU$6.5 million on procuring 3.5MGz in the 3.4GHz band in Adelaide and Sydney for AU$6.1 million; 7MHz in the 2.3GHz band in Melbourne and New South Wales East for AU$372,000; and 2.5MHz in the 3.4GHz band in Brisbane for AU$39,000.

"The acquisitions complement Optus' extensive metro holdings and enhance Optus' capability to provide 4.5G services. It also sets Optus up to offer high capacity 5G services in the major metropolitan markets in the future," parent company Singtel said in its results announcement.

Total operating revenue for the quarter was AU$2.33 billion, up 5.5 percent from AU$2.21 billion, with earnings before interest, tax, depreciation, and amortisation (EBITDA) of AU$739 million, up from AU$650 million a year earlier.

Net profit was AU$262 million, up 39.3 percent from AU$188 million, with CEO Allen Lew also attributing the telco's growth to its focus on media content, which saw it enter a partnership with Seven Network for data-free streaming of the 2018 Australian Open, Winter Olympic Games, and Gold Coast Commonwealth Games.

"This is a pleasing result that demonstrates our continued focus on compelling content such as premium sports, National Geographic, and free live streaming of music and video, and consistent network investment is really resonating with Australian consumers," Lew said.

"Strong post-paid mobile customer growth for the quarter has also benefited from new premium handset releases and continued network expansion."

In the consumer segment, Optus made AU$381 million from mass-market fixed services -- which benefited from AU$78 million in National Broadband Network (NBN) migration and site preparation revenues during the quarter -- and AU$145 million from wholesale fixed services.

Contributing to mass market fixed was AU$79 million from voice, down 13.9 percent; AU$96 million from broadband, down 17.1 percent; and AU$30 million from pay TV, up 6.7 percent.

Contributing to wholesale fixed was AU$145 million from data and IP, up 5.1 percent; AU$25 million from voice, down 8.5 percent; and AU$61 million from satellite, down 12.6 percent due to the conclusion of Optus satellite services to NBN.

"Australia Consumer reported robust growth in operating revenue of AU$141 million or 7.8 percent this quarter amid a highly competitive market. The increase was due to highest ever post-paid handset customer growth achieved this quarter, higher NBN migration payments, and increased equipment sales," Singtel said.

Optus said its mass-market fixed segment grew mainly thanks to higher NBN revenue after adding 224,000 NBN customers during the last year. However, Optus pointed out that thanks to NBN's cease-sale on hybrid fibre-coaxial (HFC) while it repairs customer experience issues, growth in customers will slow in the last quarter of the financial year.

"Optus expects that its NBN customer growth will moderate and revenue from NBN migration payments will decline from prevailing levels," Singtel said.

"The decline will be partially mitigated by higher margin from existing customers on Optus' HFC network and lower NBN on-boarding costs."

In the Australia enterprise segment, Optus brought in AU$146 million in ICT and managed services operating revenue, down 12.7 percent thanks to "phasing of projects and some large one-off product sales in the last corresponding quarter"; AU$79 million in data and IP, which remained stable; AU$73 million in voice, down 6.3 percent due to customers switching to lower-cost IP-based solutions; and AU$72 million in mobile, up 9.2 percent.

Singtel reported a total net profit of SG$890 million on revenue of SG$4.6 billion for the quarter.

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