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Optus ICT and mobile services drive profit up 13 per cent

Optus ICT and mobile services drive profit up 13 per cent

Mobile segment best all-round performer, up 21 per cent

Optus has significantly bolstered its profits thanks to a strong ICT and mobile services growth. But the positive results were less impressive for the telco’s Singaporean parent company, SingTel (ASX: SGT), as a weak Australian dollar wreaked havoc on exchange rates.

First quarter figures show Optus' operational revenue reached $2.2 billion, ramping up year-on-year growth to 12 per cent. Total net profit hit $139 million, up 13 per cent, with free cash flow up 19 per cent to $139 million.

Major contracts with clients such as ANZ saw ICT and managed services hit $140 million, a 34 per cent increase on last year's $104 million. But overall business growth only reached 7 per cent as it was dragged down by sluggish voice and data earnings, which fell 11 per cent and one per cent, respectively.

The mobile segment, including wireless broadband, was the best all-round performer, gaining 21 per cent. Optus managed to bring in 213,000 new customers over half of which committed to postpaid contracts, doubling its mobile client based year-on-year. The telco attributed the positive mobile outcome to the popularity of the iPhone and the introduction of Timeless plans.

While wholesale fixed line business jumped 6 per cent, Optus’ consumer and SMB side slid five per cent as unprofitable resale product customers either left or migrated to the telco’s direct services. As a result, local access resale (LAR) or off-net revenues plunged 44 per cent.

But Optus’ general revenue boost did not translate well in Singapore dollars and the company’s contribution to Singtel suffered. The parent company’s revenue rose only 1.9 per cent to $3.85 billion. Had the Australian dollar been stable from last year, Singtel’s revenues would have skyrocketed 12 per cent.

Optus has recently engaged in a new business venture with Samsung, bringing a netbook and wireless broadband bundle to the market.


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