Optus eyes off Telstra in mobile market

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SINGTEL INVESTOR DAY DOWNLOADS:
1. Optus Overview and Strategy
2. Mobile Business Overview
3. Fixed Business Overview

[xref:http://www.arnnet.com.au/distributor_directory/vendor/498526075/optus|Optus|Optus distributors]] is keen to secure more marketshare in the ever-growing mobile market and is keeping a close eye on Telstra as the incumbent telco continues to boost its mobile subscriber base.

Since last year, Telstra has been on a blitz to get a bigger slice of the mobile services market, adding 919,000 users in the December 2010 quarter and 364,000 users in the March 2011 quarter. Meanwhile, Optus only added 276,000 and 103,000, respectively.

Telstra’s tactics have been aggressive, slashing prices on mobile plans despite reaping lower margins. The subscriber base growth in the December quarter did not significantly boost its revenue in mobile services.

All these points were noted in SingTel Investor Day presentation by Optus CEO, Paul O’Sullivan, yesterday. SingTel is the parent company of Optus.

The telco’s presentation also looked at the status of Vodafone Hutchison Australia (VHA) in the mobile market. While VHA, like Telstra, was offering competitive prices on its mobile plans, the telco actually lost 150,000 customers in the March 2011 quarter.

This was likely due to a string of incidents, including loss of private customer information and poor network coverage, leading to a battered public image which VHA was still trying to salvage.

A number of customers that have defected from VHA may very well have joined up with Telstra for better network coverage. Telstra NextG is regarded as the fastest mobile data network in Australia.

This seems to have given the telco and advantage especially when Australians now consume more mobile data than ever before.

While Telstra continues to gain headway in the mobile market and a wave of new entrants in this space, Optus saw plenty of opportunity to compete. Strong devices take-up driven by a flood of smartphones and tablets is predicted to stimulate growth in the mobile market.

Optus will concentrate on improving customer experience, bring out up-to-date mobile devices, offer personalised digital services such as Optus Smart Safe, continue network investments and leverage its mobile distribution network in its 2012 financial year.

It currently has more than 260 Optus branded stores and over 9000 retail outlets distributing prepaid products and services.

Despite the focus on mobile, the telco said it still valued its fixed-line business and will continue to look at how to exploit opportunities presented by the National Broadband Network (NBN).

In its 2012 financial year guidance, Optus has forecasted revenue and earnings before tax to “grow at low single-digit level”. Capital expenditure is expected to be around $1.2 billion while free cash flow should be above $1 billion.

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