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Telstra Mobile King As Optus Drops 8%

Telco No. 2 Optus’ results tell a very different story to rival Telstra’s as Q3 operating revenue slumps 6% to$2.2bn, although margins and earnings rose. 

Net profit for the third quarter to December 31 fell 7.8% to $160 million Optus said today, while Telstra net profits rose 9% to $1,6 billion in six months to December 31, it said last week.

Shares in the telco fell -1.78% to $2.76 after the announcement.

Optus said its quarterly results were “stable” and it is restructuring to drive profitable growth and capitalise on the growing demand for mobile data, although like Telstra, admitted the industry was in slowdown mode.

Q3 earnings EBITDA rose 3% to $574m due to “cost efficiencies,” reduced traffic costs and the mandated decline in mobile termination rates.

Optus added 58K net mobile users and said 57% of its mobile users are on postpaid – up 3%.

However, 36K Optus prepay users left the network. Average revenue (ARPU) per user fell for both post paid and pre paid users – down 12% and 4%.

By comparison, Telstra added 265,000 postpaid users in six months and now has 6.9 m postpaid users and over 1 million on its 4G network.

Optus’ total broadband user base is 993K, while rival Telstra has 3.3 m mobile broadband users.

Optus also said there was a higher churn on wireless broadband products.

Singtel, Optus’ parent company, said Optus had made “significant progress” with 4G LTE network rollout in parts of Sydney, Melbourne, Brisbane and Perth and upgraded 4000 3G sites, but did not reveal user numbers.

Total operating expenses decreased 8%, driven by lower acquisition and retention costs and cost management. 

“The performance of the Group demonstrates the resilience of our core operations and focused execution even as we recognise the challenges in the various markets, ” said Chua Sock Koong, SingTel Group CEO.

Singtel boss said  “we are executing our transformation planto grow in the new digital era, exploiting opportunities in mobile data and enterprise ICT services to grow our share of the customer wallet. “

The Group is focused on delivering attractive tiered data  plans, meeting customer demand for higher speeds and delivering a better user experience.

Singtel group net profit also fell 8%.