Optus reports mobile growth, fixed revenue decline

Australia's number two telco Optus generated $175 million in the most recent quarter of its financial year, a double-digit growth on the previous quarter, but the growth in its mobile services was dragged down by declines across its fixed divisions.

For the quarter ending 30 September 2010, operating revenue was $2.32 billion, which was up 4.7 percent on the corresponding period last year.

In its half-yearly financial statements, the telco said this was "a reflection of its on-net strategy and prudent cost management".

The growth was driven primarily by its mobile division, which grew from $1.381 billion to $1.498 billion or 8.5 percent over the same timeframe.

Between June 30 and September 30, 2010 Optus grew its mobile customer base by 189,000.

Optus now boasts one million wireless broadband customers out of a total mobile base of 8.9 million, an 8 percent increase from a year ago.

However, the increase in its mobile business was offset by losses across its fixed line division, which collectively suffered a revenue decrease of $45 million over the half year to September 30, compared with the corresponding period the previous year.

Over the same period, Pay TV revenue dropped from $59 million to $45 million (24 percent) and HFC broadband customer base dropped from 430,000 to 424,000.

The HFC customer drop comes in spite of a significant investment in upgrading this infrastructure, but the company said the decline slowed between June 30 and September 30 this year.

Optus chief executive Paul O'Sullivan said that the mobile marketplace is a level playing-field, compared with the less competitive fixed line business.

"We're a very large mobile driven organisation because in Australia the regulatory settings have favoured a level playing field in mobile," O'Sullivan said.

"That's the issue we're now trying to get addressed through the reform of the industry associated with the National Broadband network."

The telco also cut capital expenditure across its fixed line business, while it poured money into the mobile division.

Mobile investment grew from $258 million to $313 million in the half year to 30 September 2010, compared to the corresponding period in 2009.

Over the same period the telco cut investment in business and wholesale fixed line from $120 million to $81 million (32 percent) and consumer and SMB fixed from $42 million to $41 million.

Other capital expenditure of $108 million was incurred to upgrade core IT systems, facilities, network infrastructure and the acquisition of additional Southern Cross capacity.