Optus does it tough for mobile share
TheAustralian writes…OPTUS continues to do it tough in the challenging telecommunications sector with slower revenue growth and reduced profits for its third quarter.Optus’ s operating revenue was up 3.1 per cent to $1.92 billion, but was only up 1.1 per cent excluding acquisitions.
Its operational earnings before interest, tax, depreciation and amortisation was down 3.9 per cent and Optus’ net profit of A$135 million was down 15 per cent.
Optus has fallen off sharply on all major financial measures over the past nine months but has stabilised its earnings margins at 26 per cent.
“Despite negative impacts on revenue growth from reduced mobile termination rates, Optus remains committed to maintaining market share, managing costs and investing for growth,” Optus chief executive Paul O Sullivan said.
“During the third quarter, we continued to expand our 3G network, we grew our mobile and broadband customer bases, we increased data speeds and delivered better content and applications to our customers,” he said.
Mobiles, the group’s biggest business, saw revenues growth of 3 per cent to $1.098 billion, lower than its nine month figure of a 4.3 per cent rise. Usage was up 2 per cent and average user revenues each months also up slightly.
But Optus is now being beaten by most of its rivals for new customers, resulting in its market share edging backwards.
Its business and wholesale group saw an 8.1 per cent rise in revenues tp $404 million.
Optus’ s biggest problem continues to be its consumer and small business group where revenues fell from $412 million to $400 million compared with the same period last year.
The division’s EBITDA margins slumped dramatically from 12 per cent to a bare 5 per cent.
The company blamed people moving voice traffic from fixed to mobile networks and the of delaying its own DSL network. Optus added 52,000 broadband subscribers for the quarter and moved 62,000 broadband users across to its own DSL network.
Still, the deterioration in fixed line business, slower revenue growth and margin erosion are problems that have bested all the major players in the sector.
Last week, Telecom New Zealand’s half-year results showed that its local subsidiary AAPT continued to show a decline in revenues and earnings.
Next week, Telstra will unveil its half year profit results with market analyst expecting a continuing decline in EBITDA margins.
Net profit after tax at Optus’s parent, Singapore Telecommunications, for the quarter increased 13 per cent to S$994 million.
The increase in profit was driven primarily by regional mobile companies in which SingTel has investment. They contributed S$368 million in post-tax profit, representing 43 per cent of the Group’s underlying net profit, up from 41 per cent a year ago.
