Optus feels the bite of intense competition

Stuart Corner
Saturday, 10 September 2005 14:19

IT Industry - Deals

Optus has reported revenues for the quarter to 30 June 2005 up 4.8 percent to $1,742 million, EBITDA up 2.1 percent to $516 million but net profit down marginally from $151 million to $150 million (all figures compared to the same quarter last year). Capex in the quarter increased by 38 percent to $257 million as the 3G roll out continued. CEO, Paul O'Sullivan, said the result reflected the intense price competition across the telecommunications industry, especially in the mobile and fixed business markets.

During the quarter, Optus Mobile contributed 56 percent of revenue growth and the fixed line divisions 44 percent. In the quarter, Optus Mobile invested some $30 million more in subscriber acquisition costs than in the preceding quarter "to acquire and retain high-value customers". Approximately seven percent of the total postpaid customer base are now using capped plans. Together with lower termination rates, this has impacted postpaid ARPU which declined by 5.4 percent.

Optus says that, "once it has sufficient certainty from its regulatory and commercial negotiations", it will use the unbundled local loop copper to build its own network for broadband and voice services. Optus denies that it has commenced rollout of this network, but others maintain they have seen the equipment installed in Telstra exchanges.