Optus posts 5.4 per cent increase in third quarter profit

Optus posts 5.4 per cent increase in third quarter profit

Company seeks to capitalise on increasing demand for data

Optus chief executive, Allen Lew.

Optus chief executive, Allen Lew.

Optus has recorded a 5.4 per cent increase in third quarter net profit on the back of a return to growth in operating and mobile service revenue.

According to a company statement, this reflects the company's long-term strategy to capitalise on customers’ increasing demand for data.

The company posted a net profit of $230 million for the quarter. Operating revenue rose 1.7 per cent, while mobile service revenue increased 1.2 per cent.

The company's EBITDA increased 1.2 per cent year-on-year to $652 million.

Free cash flow for the quarter was $138 million, reflecting increased capital expenditure on Optus’ accelerated mobile network expansion program.

In addition, payments of $652 million were made this quarter for the acquisition of spectrum which Optus is deploying in its national 4G rollout.

The 2600MHz spectrum is generally available from October 2014 and the 700MHz spectrum is available from January 2015.

According to a company statement, it is making progress with its strategy of offering simpler plans that give customers the confidence to use data and the rollout of 4G services that satisfy demand for faster speeds and better network quality.

"Optus is improving customer experience and capitalising on consumers’ growing demand for mobile data with a range of differentiated mobile plans to drive profitability in the mobile business," the statement said.

Read more: Optus 4G expands reach in Darwin

"This strategy is delivering positive results with strong take-up of tiered data plans and data sharing contributing a 7 per cent increase in data revenues for the quarter and blended average mobile revenue per user [ARPU] increasing 2 per cent on the same quarter last year.

Optus Chief Executive Officer, Allen Lew, said, the company had achieved solid sales momentum during the period with strong demand for My Plan Plus and data sharing plans, combined with a compelling ‘Switch’ postpaid mobile offer and a revitalised portfolio of prepaid plans.

"Optus’ prepaid and postpaid mobile handset customer base grew strongly with net additions of 65,000 this quarter," he said.

During the quarter, Optus made significant investments to its mobile network, upgrading 2245 4G sites.

Lew said expanding the company's national 4G network to 90 per cent of the population by April 2015 underpinned its strategy for driving long term data revenue growth.

"We are well on schedule to turn on new 4G spectrum in all state capital cities and over 100 regional towns throughout January 2015,” he said.

Customers using Optus’ 4G network rose to 2.75 million, up from 2.43 million last quarter.

Its Net Promoter Score improved to +6, while new complaints to the Telecommunications Industry Ombudsman (TIO) fell 47 per cent year-on-year during the 12 month period ended June 2014, and monthly mobile postpaid retail churn declined to its lowest level in seven years at 1.32 per cent.

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