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Optus Profit Slips, Mobile Flat, Broadband Up 15%

Optus has released its latest half-yearly earnings report, posting a 2.7% drop in profit – driven by a relatively flat mobile sector and a burgeoning broadband division.

Optus notched a half-yearly profit of $347 million (in the six months to September 30th), down from last year.

Net profit for the quarter dropped 4% year-on-year to $175 million, reportedly hit by investments in mobile infrastructure.

Notching a 4.4% year-on-year jump, Optus’ half year EBIDTA (ending September 30th) reached $661 million. Operating revenues climbed a minor 0.2% to $2.1 billion.

[Source: Optus Corporate Affairs]

Revenues from Optus’ consumer mobile division slipped slightly (around 1%) year-on-year to $1.27 billion.

Singaporean-based parent company, Singtel, affirms that continued customer growth and lower expenses have helped lift earnings:

“In Australia, Optus delivered strong mobile, particularly in branded postpaid, and NBN customer growth”

“Continued customer growth and lower expenses lifted EBITDA by five per cent despite higher content costs and credits from device repayment plans”

“However, revenue dipped one per cent mainly due to lower equipment sales as customers held out for anticipated smartphone launches as well as adopted more handset leasing plans”.

The telco has added a “record” 72,000 new NBN customers, now boasting a total of 351,000 NBN broadband customers. The telco is receiving payments from the NBN Co for its HFC network.

Postpaid mobile subscriptions jumped by 75,000. Pre-paid customers dropped 24,000 – Optus claims it is pursuing more ‘profitable’ prepaid customers.

Average user revenue slipped 3% for both prepaid and postpaid, notching $21 and $46 respectively.

“Optus continued to invest in its mobile networks, reaching 96.5 percent of 4G population coverage with 6,382 sites upgraded to 4G, of which 5,387 have been upgraded to 700 MHz spectrum”, a company spokesperson states.

The telco reduced expenses via staff cuts – dropping from 8,896 in September 2016 to 8,278 this year.

Revenues from the telco’s fixed broadband business jumped 15% to $353 million, following the doubling of off-network revenue, against a 10% decline in on-network revenue.

The telco’s wholesale fixed revenue slipped 9.5%, following a 12% drop in satellite revenue.

Revenues from Optus’ enterprise segment climbed 5.7% year-on-year to $415 million. The Department of Agriculture has extended its contract with the telco, valued at $13.6 million.

Concerning its future outlook, Optus expects low single-digit revenue growth from mobile services.

In October, the telco announced it would partner with ‘Southern Phone’ – an NBN satellite retail service provider – to offer NBN satellite services.

Last week, the Optus started selling a wireless broadband service to be sold to mobile ‘virtual network operators’.

Optus, Chief Executive, Allen Lew affirms that the continued strength of its consumer and enterprise division will help drive the telco forward:

“Optus’ strong momentum in consumer and enterprise segments is supported by our mobile network investment program, compelling content and new technologies”

“To support our customer and digital focus we launched our first flagship experiential store in Sydney where customers can explore Optus’ range of services across our 4.5G mobile network”.

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