Thursday, 13 February 2020 14:37

Quarterly revenue, profits down, mobile customers increase for Optus Featured

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Australia’s second largest telco Optus has reported “slightly lower” quarterly operating revenues year on year, down from $2,419 million in 2018 to $2,393 million for 2019, with higher NBN migration revenue offsetting lower equipment and service revenues.

Optus also reports that net profit for the quarter declined to $131 million, down from net profit of $172 million in 2018, while free cashflow was up 70% to $271 million.

And for the third quarter and nine months ended 31 December 2019 mobile service revenue declined 3%, reflecting what Optus said was a higher proportion of SIM-only customers and data price competition.

“The reduction in handset subsidies has led to lower demand for handsets, impacting quarterly Mobile Equipment revenue,” said Optus.

On a brighter note, Optus reported that mobile customers increased by 229,000 services, including 57,000 new postpaid mobile services and 157,000 prepaid mobile services.

The telco also reports that EBITDA increased 6% to $700 million, underpinned by NBN migration revenues - and excluding NBN migration revenue, EBITDA declined 25% “due to increased traffic costs from a higher NBN customer base and lower contributions from mobile equipment revenues”.

In Mass Market Fixed, Optus’ NBN customer base grew by 254,000 customers from a year ago and fixed retail revenue grew 46%, driven by higher NBN migration revenue and strong NBN customer growth.

In the enterprise market, Optus Business quarterly revenue and EBITDA declined year on year reflecting what Optus said was “intense competition, including from new entrants reselling the NBN”.

On a sequential quarterly basis, Optus Business posted higher revenue and EBITDA “as improved orders reflect measures taken to stabilise the business”.

The telco also said that a strong focus on cost management saw a 4% decline in operating expenses for the quarter.

Optus CEO Allen Lew said, “This has been a transitional quarter as we adjust to increasing customer demand for SIM-only plans. We have listened to Australians and introduced our new differentiated Optus Choice and Optus One plans that provide customers with the flexibility to personalise their plan features and pricing.”

Lew noted that Optus continued to roll-out 5G sites with over 400 5G sites switched on at the end of December 2019.

“We achieved a major milestone in the quarter as we brought our 5G services for both home internet and mobile to the Australian market. Our 5G home internet service has achieved excellent customer feedback as it delivers an always-on and reliable super high-speed internet into the home,” said Lew.

According to Optus, exclusive content remains a core differentiator., with Optus Sport reaching 825,000 active subscriber accounts :as football fans continue to enjoy exclusive premium football content, including the recently- announced premier Japanese football tournament, the J League”.

Optus also notes that it topped Brand Finance’s “prestigious Top 100 list of Australia’s Strongest Brands” - a leap from 4th place a year ago.

“As recent bushfires devastated parts of Australia, the Optus teams across the business pulled together to keep Australians connected and to activate a range of measures to support customers, volunteers, and small businesses, including the announcement of our Green Shoots program to support efforts to rebuild local communities over the coming year,” Lew concluded.

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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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