Optus net profit drops despite user, services growth

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Optus net profit drops despite user, services growth

700MHz spectrum buoys 4G coverage plans.

Optus today posted growth in mobile service revenue and customer numbers for its most recent quarter, offset by an 8 percent fall in net profit.

Optus' parent Singtel today released its figures for the past three months, revealing the Australian telco managed a 6 percent jump in operating revenue to $2.3 billion.

Mobile service revenue increased by 4 percent to $1.2 billion, which Optus said was driven by 96,000 new mobile handset customers, a 12 percent increase in data revenues and continued take-up of new mobile plans.

The growth in its customer base and higher data usage by mobile customers also boosted average mobile revenue per user by 5 percent on the previous corresponding quarter.

The January release of the 700 MHz spectrum Optus and others purchased at auction in 2013 buoyed take-up of 4G services and allowed the telco to inch closer to its goal of covering 90 percent of the Australian population with 4G services by April this year.

It is currently sitting at around 80 percent with 2736 4G sites nationally, and 3.1 million handsets on the network. Since the prized spectrum became available at the start of January, Optus upgraded around 1200 metro and regional sites to use 700MHz.

But the positive customer and revenue results were let down by an 8 percent fall in net profit (compared to the previous corresponding quarter) to $208 million - which Optus attributed to high net finance expenses, particularly higher dividends received from associates in the same quarter of 2013.

Singtel expects mobile service revenue will increase by low single digit figures for the full financial year, ending March 31. It grew by 1.6 percent in the nine months to December 31 2014.

The parent also expects to fork out around $900 million predominantly in payments for Optus' 700 MHz spectrum.

It has forecast $1.4 billion in capital expenditure for Australia, to go towards improving Optus' mobile network, customer care and management systems.

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