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Optus second quarter continues NBN and postpaid customer growth

Indicators are headed in the right direction as the telco shed almost 7 percent of its staff in the past year.
Written by Chris Duckett, Contributor on

Optus has posted another solid but not spectacular quarter, with the telco seeing its operating revenue remain flat and earnings grow on the back of reduced expenses.

For the quarter ending September 30, the company reported a 4.4 percent year-on-year (YoY) increase in earnings before interest, tax, depreciation, and amortisation (EBITDA) to AU$661 million from AU$2.1 billion in operating revenue, which saw a 0.2 percent increase.

As of the end of the quarter, Optus had a headcount of 8,278, down from the 8,896 reported at the same time last year.

In its consumer mobile division, the company saw a slight YoY drop in revenue to AU$1.27 billion, but saw its postpaid mobile subscriptions grow by 75,000, which the company said was due to its recent network investments and content offerings.

"Optus continued to invest in its mobile networks, reaching 96.5 percent of 4G population coverage with 6,382 sites upgraded to 4G, of which 5,387 have been upgraded to 700 MHz spectrum," the company said.

The number of prepaid customers on its network decreased by 24,000, with the company saying it was looking more towards profitable prepaid customers.

Average revenue per user was down 3 percent in both prepaid and postpaid segments to AU$21 and AU$46, respectively.

In the fixed broadband business, Optus added another 72,000 NBN customers. If it continues the trend that has seen it add 187,000 NBN customers in the past year, it will make NBN Optus' largest fixed broadband customer base, surpassing its dwindling cable and ADSL networks.

The fixed broadband business saw a 15 percent increase in revenue to AU$353 million on the back of a doubling of off-network revenue, which countered against a 10 percent drop in on-network revenue.

On the down side, Optus said its wholesale fixed revenue was down 9.5 percent due to a 12 percent fall in satellite revenue.

The enterprise segment experienced a 5.7 percent YoY jump in revenue to AU$415 million, with EBITDA increasing 3.8 percent to AU$68 million. During the quarter, the Australian Department of Agriculture extended its contract with Optus for three years, valued at AU$13.6 million.

Looking ahead to its year-end on March 31, 2018, Optus is expecting low single digit mobile service revenue growth.

In October, Optus announced it would partner with NBN satellite retail service provider Southern Phone to offer NBN satellite services.

"With only 80,000 of the NBN's forecast of 240,000 Sky Muster satellite services connected to date, we look forward to offering our services across the country and making a real difference to the people in regional and rural Australia," Southern Phone MD David Joss said at the time.

Last week, Optus Wholesale added a wireless broadband service to sell to mobile virtual network operators.

"Home Wireless Broadband is an alternative to fixed broadband, so our wholesale partners are now able to offer a solution for people living in areas where NBN has not yet been rolled out or for people that like a plug and play option for their home internet service," Optus Wholesale VP of Sales and Marketing John Castro said.

Also during the quarter, the company completed a Massive Multiple-Input Multiple-Output (MIMO) trial, telling ZDNet that in a world first, it combined the Massive MIMO technology with three-cell carrier aggregation to attain combined throughput of 818Mbps.

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