Optus sacrifices data revenue for customer growth

Optus CEO Allen Lew is aiming to grow the company's customer base through plans designed not to punish customers for using too much data.

Optus CEO Allen Lew has said that the company's strategy to grow its customer base is not hinged on the release of new phones, but rather on luring customers with mobile plans that are designed not to punish customers for using more data.

In Q3 results released on Thursday, the Singtel-owned company reported 100,000 new subscribers in the last three months of 2014, including the launch of the iPhone 6.

Due to the company's data-sharing plans that can see data shared across mobile and tablet devices, Optus changed the way it reports subscriber numbers, and, as a result, saw a decline in total subscriptions by 12,000 in the quarter.

The company saw a 4.3 percent increase in mobile revenue across prepaid, post-paid, and mobile broadband in the quarter to AU$1.22 billion, while revenue across the board was up 7 percent.

Lew told ZDNet in an interview on Thursday that this was largely a result of "robust mobile customer subscriber growth" off the back of the take-up of Optus' MyPlan, and a 12 percent increase in data revenue. Lew said it wasn't just the iPhone that brought on a second quarter of customer growth for Optus.

"The iPhone was a pretty iconic shift in terms of smartphones, and we've seen that drive significant numbers for us. The reason we're seeing that growth is more agnostic in terms of devices," he said.

"We believe our MyPlan services, MyPlan Plus in particular, are gaining traction with our consumer customers because it removes a lot of the bill shock and gives them the security that if they use the service and they exceed their data allowance, they get automatically moved to the next tier, which for us is only a AU$10 increase."

Lew said that removing the so-called "bill shock" element of customers receiving large data bills also grew loyalty.

"[It's about] making sure customers feel they're not getting ripped off if they accidentally use too much," he said.

Churn was 1.4 percent for the quarter, slightly higher on the previous quarter, but Lew said that was "pretty typical" for customers shopping around in the Christmas period.

The company will now focus on its 4G rollout, planning to reach 90 percent of the population by the end of March, and offering more 700MHz-compatible 4G devices now that Optus has been able to officially begin using the spectrum it purchased in 2012.

As Vodafone and Telstra look to increasingly offer content bundling on mobile services, Lew said it is something that Optus is also considering.

"We are looking at all sorts of different video opportunities to bundle with content providers that have a strong brand image in the minds of our customers," he said.

He said Optus is working on some things across both video and other "disruptive" industries.

After a significant period of stagnation, Lew said he is confident that Optus is returning.

"We're optimistic that the second consecutive quarter of growth represents us coming back into the market," he said.

"We'll continue to focus on our market-leading customer experience, investing even more in our mobile and fixed networks, and bringing innovations in services and products.

"Optus has been very much a mobile company; if you look at our strategy going forward, we want to be much more integrated. At the end of the day for us, our strategy is to make sure we have the right resources to meet those needs."