Optus wins more mobile customers, earns less revenue

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Optus wins more mobile customers, earns less revenue

Invests in networks, reduces headcount.

Australia’s second largest carrier Optus added nearly 60,000 new mobile customers and increased its post-paid accounts by three percent in the last quarter, according to the latest SingTel quarterly report.

The mobile business remains the strongest part of the SingTel-Optus organisation, with mobile revenue making up 66 percent of total revenue.

However the increase in handset and post-paid numbers was offset by a significant drop in the number of Optus customers buying standalone mobile data dongles. Higher rates of churn, along with reduced dongle subsidies, lead to a decline of 36,000 customers.

The company’s total revenue also experienced a slight decline, down six percent to $2.28 billion. An emphasis on cost control, however, lead to a slight increase in EBITDA, up two percent to 25.2 percent. Underlying net profit was also up 2.7 percent, to $181 million.

The business and wholesale side of the organisation also suffered a slight decline in revenue, down two percent. In the wholesale space, Optus ditched its TeleChoice and Allphones premium resellers late last year and discontinued its Boost white label service on January 20.

Telstra subsequently picked up Boost, which has a strong appeal in the youth action-sports market.

The Virgin VMNO business was also integrated into the overall Optus corporate structure during the quarter.

Optus’ free cash at hand also decreased to $519 million, down 30 percent. The carrier blamed the decline on higher capital expenditure and higher working capital due to handset receivables.

This capital expenditure has two prongs, with a long-term core network overhaul begun in 2011, and the ongoing roll-out of LTE (4G) in capital cities. The core network overhaul, overseen by Nokia-Siemens Networks, is on track, the company indicated.

The company’s 4G coverage now extends to Sydney, Melbourne, Brisbane and Perth, along with the Gold Coast.

Optus has also focused on delivering higher productivity through headcount reductions. Headcount dropped nearly ten percent year on year, with 305 less employees during the quarter. 

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