Optus also blames NBN for profit drop

Optus has announced a nine-month net profit of AU$431 million and EBITDA of almost AU$2 billion on revenue of AU$6.8 billion.
Written by Corinne Reichert, Contributor

Optus has announced a profit drop of AU$147 million year on year for the nine-month period to the end of December, falling to AU$431 million, with the telco citing lower National Broadband Network (NBN) migration payments.

Underlying net profit also dropped by 15 percent to AU$488 million, while earnings before interest, tax, depreciation, and amortisation (EBITDA) decreased by 3.4 percent from just over AU$2 billion to AU$1.95 billion.

Despite this, Optus said it had "strong sales momentum", with operating revenue up 5.2 percent to AU$6.8 billion and Optus CEO Allen Lew pointing to growth across mobile subscribers and the launch of its commercial 5G service.

"We are proud to be first in market with a 5G home broadband service," Lew said.

"Our customers can continue to expect more innovation, entertainment services, value-added solutions including cybersecurity, and game-changing customer experiences in the future."

Earlier this week, Optus switched on its fourth 5G mobile tower, with 50 sites due to be online by March to provide coverage to 60 suburbs.

Optus plans to have 1,200 5G mobile sites live by March 2020 across New South Wales, Victoria, Queensland, the Australian Capital Territory, South Australia, and Western Australia.

5G Home Broadband on Optus will cost AU$70 per month for unlimited data at a 50Mbps minimum speed guarantee, and is slated to provide connectivity by the second quarter of 2019.

Optus is working with both Nokia and Ericsson, with Lew saying the company will be taking a "multi-vendor approach" to its network. In an interview with ZDNet, Lew also denied that the Huawei 5G ban had an impact on the rollout, saying that it neither slowed it down nor made equipment more expensive.  

On the smartphone side, Optus is working with all smartphone manufacturers, and expects to see 5G phones in the May/June window.

For the nine months to December 31, consumer revenue was up by 6.5 percent to AU$5.7 billion, with mobile revenue climbing from AU$3.8 billion to AU$4.3 billion; mass market fixed revenue dropped by 5.7 percent to just over AU$1 billion; and wholesale fixed revenue also fell by 4.7 percent to AU$410 million.

As of December 31, Optus had 10.2 million mobile customers -- 5.6 million post-paid, 3.5 million prepaid, and 1.2 million mobile broadband -- after adding 295,000 over the last year.

Mobile average revenue per user (ARPU), however, dropped by AU$2 year on year in both post-paid and prepaid mobile services, down to AU$42 and AU$19, respectively.

By the end of 2018, Optus had 7,242 4G mobile sites covering 97.2 percent of the population, after launching over 140 new sites during the most recent quarter.

Optus also added 145,000 NBN customers over the year for a total of 560,000, while its TV customers rose from 474,000 to 513,000.

Enterprise revenue was down by 1.1 percent to AU$1.1 billion for the nine-month period, made up of AU$484 million from IT and managed services; AU$228 million from data and IP; AU$205 million from mobile; and AU$186 million from voice.

Optus Business grew its enterprise customer base by 11 percent during the year, while also expanding its cybersecurity capabilities through the acquisition of Hivint at the end of last year.

"This acquisition will strengthen Optus Business' cyber security capabilities as Hivint's advisory services will be integrated with Trustwave's security offerings across Australia and the Asia Pacific," parent company Singtel said.

Also presenting its results on Thursday, Singtel revealed losing 40 million mobile customers in the quarter to December 31, largely fuelled by competition in India.

As of the end of December 2018, Singtel had 4.2 million mobile customers in Singapore; 10.2 million in Australia under Optus; 41 million in Thailand under AIS; and 74 million in the Philippines under Globe. Telkomsel in Indonesia was down from 168 million to 163 million quarter on quarter.

Airtel gained customers in Africa and South Asia for a total of 97 million and 2.5 million, respectively, but lost almost 50 million customers in the quarter to December 31 in India for a base of 284 million.

In total, Singtel reported having 677 million mobile customers across the group, dropping well below the 700 million mark it had announced in May last year.

Related Coverage

Singtel Group loses 40 million mobile customers in one quarter

'Aggressive' and 'intense' competition from a carrier in India caused Singtel Group to drop 40 million mobile customers in the most recent quarter.

Telstra blames NBN for H1 profit plummeting by AU$500 million

Telstra gained mobile customers, but lost revenue due to the migration of customers to the NBN.

Telecommuting policy

As more and more employees request the opportunity to perform some or all of their work from a remote location, the need has grown for organizations to have clearly defined guidelines that govern employee...

Intel and Ericsson develop 5G platform

Ericsson and Intel have announced another collaboration, this time for a software and hardware management platform for 5G, NFV, and distributed cloud.

Did AT&T trick your business into paying for fake 5G? Sprint lawsuit says yes (TechRepublic)

Sprint is suing AT&T over use of "5G E" to characterize industry standard LTE Advanced technology, as their market research finds AT&T's marketing ploy confuses subscribers.

5G, smart cities, and other top tech trends for 2019 (TechRepublic)

Quantitative futurist Amy Webb shares her predictions for 2019 tech trends.

Editorial standards