Friday, 15 November 2019 12:08

NBN migrations help lift Optus to profit, but mobile revenues fall Featured

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Optus CEO Allen Lew on a recent visit to Rockhampton Optus CEO Allen Lew on a recent visit to Rockhampton

Optus pulled in revenue of $2,207 million for the three months to the end of September to deliver an increase in profits for the quarter due to increased NBN migration.

Profits were up despite slightly lower average mobile user revenue (ARPU) with Australia’s second largest telco describing revenue as “stable”, on the back of double digit growth for the three months.

Mobile service revenue declined 4% due to the lower ARPU, from what Optus said was a higher mix of SIM-only customers and heightened data price competition.

However, the price changes to mobile plans saw a stabilisation in ARPU against the June quarter.

Optus reported that EDITDA increased 11 percent to $703 million and net profit and free cash flow increased 24% and 22% to $130 million and $357 million respectively.

And postpaid handset customers rose by 30,000 over the quarter.

In its retail fixed business, Optus says its investment in the NBN Concierge Program improved customer experience and lifted NBN connections to a record 80,000 customers for the quarter.

“NBN migration revenue rose strongly with an increase in customer migration to the NBN,” Optus said.

Optus says its performance for the three months was impacted by market headwinds but, during the quarter, Optus Business announced that it has entered into an agreement with nanosatellite IoT operator Myriota which will offer customers across multiple industries “lowcost, long battery life connectivity for millions of devices”.

For the first half, Optus operating revenue increased to $4,457 million, underpinned by what the telco says was customer growth and higher NBN migration payments.

EBITDA increased 8% to $1,390 million from higher NBN migration revenue and strong cost management.

Net profit for the half was $235 million and free cash flow was up 39% to $586 million.

“Optus has demonstrated resilience in the quarter with continued mobile and fixed customer growth,” said Allen Lew, Optus chief executive.

“With continuing momentum, we now move with confidence into the 5G era having launched our unique-to-Australia 5G service for both the home and mobile in recent weeks.”

Optus’ parent company Singtel’s operating revenue for the second quarter was S$4.15 billion, with the Singpore-based company reporting what it said was a “resilient performance” by the consumer business across Singapore and Australia.

However, Singtel’s enterprise business recorded a decline in revenue due to what it saw was lower business spending, carriage erosion and headwinds in Australia.

And Singtel recorded a net loss of S$668 million the quarter, and a net loss of S$127 million for the half year.

Chua Sock Koong, Singtel Group CEO, said: “The weak global economic environment has affected the industry although on a positive note, our diversified earnings base and our cost management have lifted our performance”.

“We remain focused on delivering better customer experience and deepening customer engagement. While we expect current challenging conditions to continue into 2020, we will invest to strengthen our market position, enhance our core networks and build strategic capabilities to capture growth, and be 5G-ready.”

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Peter Dinham

Peter Dinham is a co-founder of iTWire and a 35-year veteran journalist and corporate communications consultant. He has worked as a journalist in all forms of media – newspapers/magazines, radio, television, press agency and now, online – including with the Canberra Times, The Examiner (Tasmania), the ABC and AAP-Reuters. As a freelance journalist he also had articles published in Australian and overseas magazines. He worked in the corporate communications/public relations sector, in-house with an airline, and as a senior executive in Australia of the world’s largest communications consultancy, Burson-Marsteller. He also ran his own communications consultancy and was a co-founder in Australia of the global photographic agency, the Image Bank (now Getty Images).

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