Optus net profits up despite mobile subscriber fall

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Increase in mobile ARPU, NBN subscriber numbers.

Optus’ net profits surged 9 percent year-over-year to $227 million for the third quarter of fiscal 2016, led by a 11 percent increase in mobile revenue to $1.6 billion.

Optus net profits up despite mobile subscriber fall
Optus chief executive Allen Lew.

Overall revenues for the Singtel-owned telco grew to $2.4 billion during the December quarter, up 6 percent on the same quarter last year, more than offsetting a 7 percent increase in operating expenses to $1.8 billion.

The carrier saw a 40 percent increase in the number of subscribers using 4G services, reaching 4.4 million at the end of the quarter. This led to blended average revenues per user (ARPU) per month increasing to $44, up 3 percent from a year earlier.

The increase in mobile revenue and ARPU came despite the a slight drop in the total number of mobile accounts by 0.2 percent year-on-year to 9.4 million.

A 3 percent increase in post-paid handsets to 4.7 million was not enough to offset a 1 percent fall in prepaid accounts to 3.7 million, and an 11 percent drop in mobile broadband accounts to just 1 million.

The carrier also revealed that non-SMS data now accounts for nearly half (49 percent) of its mobile service revenues.

In the broadband market, Optus’ total customer numbers grew by 3 percent to 1 million, as NBN subscriber numbers shot up 238 percent to 88,000 and HFC broadband customer numbers were up 3 percent to 433,000.

However, ULL broadband customer numbers were down 5.5 percent to 491,000, while business-grade broadband customer numbers fell 11 percent to 25,000.

Optus also saw strong growth in the enterprise market, where revenues expanded 10 percent to $416 million and EBITDA rose almost 7 percent to $75 million.

Much of the increase was attributable to a 36 percent surge in ICT and managed services revenue to $176 million. However, revenues from data and IP dropped by 8 percent to $82 million, alongside smaller drops in voice and mobile revenue.

Optus chief executive Allen Lew attributed the result to continuing rollout of the carrier’s 4G Plus network, which is now available at 4451 regional and metropolitan sites.

“In the coming quarter, Optus will continue to strengthen and extend the reach of its 4G Plus network as it increases deployment across its 700 MHz and 2600 MHz spectrum holdings,” Lew said in a statement.

The result was an improvement on the second quarter of fiscal 2016, when net profit and mobile subscriber numbers were flat.

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