Optus posts strong subscriber growth amid 'intense' competition
Optus has posted strong subscriber growth and profit for the year, despite “intense” competition between telecommunications companies for mobile customers.
Over the year, Optus gained another 384,000 mobile subscribers, reaching a “milestone” of 10 million mobile customers. It increased its national broadband network (NBN) customers by 225,000.
On Monday, its rival Telstra warned that competition in the mobile space and the impact of the NBN were pressuring its earnings, which would now come in at the lower end of its full-year guidance. Telstra’s share price subsequently fell to seven-year lows, with analysts calling for a cut in the company’s dividend and querying its strategy.
Optus chief executive Allen Lew said strong growth in new mobile and NBN customers had ensured growth in revenue, earnings and net profit despite growing tensions between telcos.
“The last 12 months in Australia has seen a period of intense price competition in the telco industry across both fixed and mobile services,” Mr Lew said.
He said there had been strong momentum, particularly in the mobile business from January to March, "notwithstanding increased competition”. It added 154,000 new mobile services for postpaid and prepaid handset and mobile broadband in the quarter.
However, NBN Co’s decision to pause its connection of households using existing pay-TV cables, known as HFC, hit Optus’ net profit in the March quarter, which was down 16.7 per cent on the previous March quarter.
Excluding NBN migration revenues, net profit increased 3.7 per cent and operating revenue was up 5.5 per cent. This was driven by strong customer growth, more equipment sales and increased revenue from ICT and managed services, Mr Lew said.
“Optus’ momentum has been driven by our execution focus on three main areas,” he said. This strategy includes building a premium mobile network, having a strong focus on the next high-speed 5G mobile network, and securing English Premier League content until 2022, and World Cup games, to provide a “key point of differentiation in the market”.
The move from telcos into the space of sports content has pitted Optus and Telstra head-to-head.
Telstra recently sub-licensed the rights to Football Federation Australia games until 2023 from Fox Sports, including opening up subscriptions to non-telco customers, in an aim to retain existing customers and gain new ones. The announcement came days after Optus publicised its EPL deal.