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​Optus half-year net profit grows 8 percent

Australian telecommunications provider Optus has recorded a net profit of AU$426 million, attributing the solid results to its mobile operations.

Optus has reported strong first half year results for the 2015 financial year with net profit up 8 percent year-on-year from AU$394 million reported last year to AU$426 million.

Earnings before interest and tax, depreciation, and amortisation (EBITDA) for the half year was also up 8 percent to AU$1.35 billion, while operating revenue achieved 9 percent growth year-on-year to AU$4.61 billion.

During the second quarter ended September 30, 2015, quarterly EBITDA jumped 8 percent to AU$706 million. Net profit remained stable for Q2 at AU$230 million.

Optus CEO Allen Lew said the positive results were underpinned by strong performance in its mobile operations.

"We have successfully captured consumers' growing demand for data through innovative plans and service, investments in our fixed and mobile networks, and compelling entertainment offers," he said.

"Over the coming quarters, we will continue to take the steps necessary to profitably grow our business with products and services that engage our customers."

Lew added continued investment in customer acquisition and retention also helped free cash flow for the quarter to AU$71 million, compared to last quarter which was AU$138 million.

Optus said it registered an additional 57,000 postpaid customers during the quarter, and added 314,000 4G customers. By the end of the period it had 4.13 million 4G Plus customers on its network, meaning 4G customers now account for 44 percent of Optus' total mobile customer base.

As a result, operating revenue was up 7 percent for the quarter to AU$2.31 billion. Optus mobile service revenue increased 3 percent to AU$1.22 billion, which it said reflected the popularity of its My Plan Plus.

Due to the growing popularity of 4G usage, Optus announced plans in August to shut down its 2G network from April 2017 to shift its customers onto the 3G and 4G networks.

Optus also partnered up with Airbnb to provide users with a prepaid SIM for international data roaming, as well discounted accommodation.

"In our drive to become a mobile-led multi-media company, we extended our partnership with Netflix, and announced two major multi-year partnerships with Cricket Australia and the Barclays Premier League. In the coming quarters, we will look to further enhance our content suite and leverage these assets to drive further customer growth," he said.

Fixed-line operating revenue increased 4 percent due to continued expansion of the National Broadband Network footprint and its unlimited home broadband entertainment bundles. As of September 30, Optus had 72,000 NBN customers, up 33 percent on last quarter, and a total of 1.05 million broadband customers.

During the quarter, the telco made progress towards improving its network, investing in upgrading its city-connect wholesale fibre network to 100Gbps, bringing faster speeds and greater capacity to Sydney, Melbourne, Canberra, Brisbane, Adelaide, Perth, and Cairns.

At the same time, Optus signed a two-year NBN aggregation deal with internet service provider Exetel. Under the deal, Exetel will have access to all of Optus' NBN points of interconnect and technologies, via its residential broadband over NBN product. The deal is expected to give Optus faster access to the NBN market and the NBN footprint with carrier-grade backhaul, without the need for heavy capital investment.

Additionally, Australian Competition and Consumer Commission granted the NBN the rights to take ownership of Optus' hybrid fibre-coaxial (HFC) network. The approval will now see Optus' HFC customers transitioned onto the fixed-line NBN, and the progressive acquisition and integration of parts of the telco's network with the NBN.

The original deal between NBN and Optus was approved by the ACCC in 2012, but Optus and NBN entered into a revised AU$800 million deal in December last year, allowing NBN to take ownership of Optus' HFC network.

In September, the telco provider continued to roll out its 4G+ network switching it on in Melbourne, and before that in Newcastle suburbs Lambton, Mayfield, and Mayfield West in partnership with Chinese tech giant Huawei. As of September 30, Optus 4G Plus is now available at 4,180 regional and metropolitan sites, and reaches more than 90 percent of the Australian population.