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Optus’ operating revenue slips 13 per cent

Optus’ operating revenue slips 13 per cent

Says loss was a result of higher financing costs and ACC’s reduction in mobile termination rates

Telecommunications company, Optus, has reported a 13 per cent decline in operating revenue for the quarter ending June 30, from $2.3 billion in 2015 to $2 billion this year. Its underlying net profit also dipped 1.9 per cent to $194 million, from $194 million the same time last year.

The company said, in a statement, that its underlying net profits decline was a result of higher financing costs.

It added that operating revenue declines were driven by the Australian Competition and Consumer Commission’s (ACCC) regulated reduction of industry mobile termination rates from January 1, higher service credits associated with device repayment plans, and lower equipment sales.

In addition, it said its operating expenses for the quarter fell 20 per cent, driven by lower domestic interconnect costs associated with reduced termination rates, lower equipment costs, lower customer acquisition and retention costs, as well as a reduction in advertising spend.

Optus CEO, Allen Lew, said the quarter was a busy one as competition remained intense, especially in the MVNO market.

“In the coming quarters, Optus will continue to strengthen and expand its national 4G network and enhance its fixed network to deliver a multi-media entertainment experience for customers,” Lew said.

Despite its losses, the demand for its 4G services have grown, with a further 1.2 million customers joining its 4G network in the last 12 months. Optus added 257,000 4G customers during the quarter, reaching a total of 4.93 million 4G customers at the end of June.

4G Plus customers now account for 53 per cent of Optus’ total mobile customer base.

Its postpaid customer growth with net additions was 19,000 for the quarter. Optus said higher churn from the introduction of customer identification verification regulations contributed to a decline in the prepaid customer base of 24,000.

In its fixed consumer mass market, its quarterly operating revenue grew four per cent. The business mentioned this was due to take-up of Optus TV, growth in Optus’ nbn customer base and nbn payments, and strong demand for resale DSL in regional markets.

Optus now has 136,000 nbn broadband customers, up from 54,000 customers a year ago. Optus has a total of 1.08 million broadband customers.

“This was a very busy quarter, as price competition remained intense, especially in the MVNO market. We’ve competed effectively with our branded, wholesale and fixed line products,” Lew added.

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