Optus Results: Decline In Revenue From ‘Intense Competition’
Today Optus has announced its quarterly operating revenues, revealing a decrease in both operating and mobile service revenue, leading a net profit decline to $131 million.
Optus quarterly revenue decreased year on year at $2,393 million after higher NBN migration revenue offsetting lower equipment and service revenues.
Mobile Service revenue fell by 3 per cent, reflecting a higher proportion of SIM-only customers and data price competition. Optus said the reduction in handset subsidies led to lower demand for handsets, impacting quarterly Mobile Equipment revenue.
‘This has been a transitional quarter as we adjust to increasing customer demand for SIM-only plans,’ Optus CEO Allen Lew said.
‘We have listened to Australians and introduced our new differentiated Optus Choice and Optus One plans that provide customers with the flexibility to personalise their plan features and pricing.’
Optus Business quarterly revenue and EBITDA declined year on year after ‘intense competition,’ including from new entrants reselling the NBN. On a sequential quarterly basis, Optus Business posted higher revenue and EBITDA, as improved orders reflect ‘measures taken to stabilise the business.’
A strong focus on cost management resulted in a 4 per cent declined in operating expenses for the quarter.
Mobile customers, however, increased by 229,000 services – including 57,000 new postpaid mobile services and 157,000 prepaid mobile services.
Optus’ NBN customer base also grew by 254,000 customers from 12 months ago, driving fixed retail revenue up by 46 per cent.
EBITDA increased 6 per cent to $700 million because of migration revenues, but overall declined by 25 per cent excluding NBN migration revenue because of increased traffic costs from higher NBN customer base and lower contributions from Mobile Equipment revenues.
Net profit for the quarter declined to $131 million, while free cash flow was up 70 per cent to $271 million.
Optus said it continued to roll-out 5G sites with over 400 5G sites switched at the end of December 2019.
‘We achieved a major milestone in the quarter as we brought our 5G services for both home internet and mobile to the Australian market,’ Lew said.
‘Our 5G home internet service has achieved excellent customer feedback as it delivers an always-on and reliable super high-speed internet into the home.’