Optus lifts profits amid mobile recovery

Over the last quarter, Optus has added 60,000 handset customers, which is a turnaround from the customer losses experienced by the telco last quarter.
Written by AAP , Contributor and  Aimee Chanthadavong, Contributor

Australian telco Optus has lifted its first-half profit to AU$394 million, after improving the performance of its mobile business.

The SingTel-owned telco's net profit rose 2.3 percent in the six months to September 30.

The profit result for the second quarter was up 5.4 percent, to AU$230 million.

Its operating revenues rose 1.7 percent, to SG$2.155 billion in the quarter, but slipped half a percent for the six-month period, to SG$4.2 billion. Meanwhile, its mobile service revenue increased by 1.2 percent.

The company's earnings before interest, tax, depreciation, and amortisation (EBITDA) increased 1.2 percent year on year, to AU$652 million.

The latest quarterly result was aided by Optus adding 60,000 new mobile handset customers, plus another 5,000 in the enterprise segment.

Optus chief executive Allen Lew attributed the results to Optus' long-term strategy to capitalise on customers' increasing demand for data.

"Optus achieved solid sales momentum during the period, with strong demand for My Plan Plus and data sharing plans, combined with a compelling 'Switch' post-paid mobile offer and a revitalised portfolio of prepaid plans. Optus' prepaid and post-paid mobile handset customer base grew strongly, with net additions of 65,000 this quarter," he said.

Optus said it is making progress with its strategy of offering simpler plans for customers and the rollout of high-speed 4G services. During the quarter, Optus upgraded its 2,245 4G sites.

"Expanding our national 4G network to 90 percent of the population by April 2015 underpins Optus' strategy for driving long-term data revenue growth. We are well on schedule to turn on new 4G spectrum in all state capital cities and over 100 regional towns throughout January 2015," Lew said.

The number of 4G customers rose to 2.75 million from 2.43 million in the quarter, while data revenues rose 7 percent.

In addition, payments of AU$652 million were made this quarter for the acquisition of spectrum, which Optus is deploying in its national 4G rollout. The 2600MHz spectrum has been generally available since October 2014, and the 700MHz spectrum will be available from January 2015.

This quarter, Optus has also managed to improve its market net promotor score by +6, while new complaints to the Telcommunications Industry Ombudsman fell 47 percent year on year during the 12-month period ended June 2014, and monthly mobile post-paid retail churn declined to its lowest level in seven years, at 1.32 percent.

The results are a turnaround for Optus, which in August reported that it had lost 25,000 mobile customers in the three months to the end of June.

Since June, Optus has launched an aggressive marketing effort and changes to its products, including data sharing across mobile devices.

The company aims to further improve its customer experience offerring, announcing that it has selected NetCracker and NEC to help deliver a multi-phased upgrade project of its existing operations support systems.

The upgrade will span across a range of Optus' line of business, including consumer and business wireless, broadband, enterprise data, voice, IT services, and IP telephony, as well as across the service fulfillment chain, from service order management to network configuration and activation.

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