Optus, and its Singaporian parent, SingTel, have reported a strong first quarter with three per cent revenue growth on the same quarter in FY2010/11.
Optus contributed $2.31 billion in revenue to the SingTel Group's overall figure of $4.61 billion, up seven per cent on the same quarter last financial year. This represented a two per cent growth in earnings before tax.
Underlying net profit for Optus was $174 million, a growth of three per cent on the same quarter in FY2010/11, though that doesn’t include the impact of exception items relating to a one-off provision for ex-gratia payment arising from workforce restructuring.
However, quarterly profit fell five per cent. SingTel posted a 2.9 per cent fall in quarterly profit, with a 7.4 per cent drop in underlying profit.
Apart from a one-off cost due to workforce restructuring, Optus says underlying profit was up 2.5 per cent at $174 million on a three per cent rise in operating revenue.
Optus’ main growth was in the mobile arena, where total revenue rose by five per cent to $1.49 billion, thanks in the large part to the acquisition of 113,000 new customers in the quarter.
The telco’s business and wholesale division was stable. Its consumer and SMB division delivered on-net revenue declines of two per cent in large part to its Pay TV initiative.
Optus announced plans for a unique IPTV service accessible across multiple devices, scheduled for launch in the second half of 2011.
In a statement, Optus CEO, Paul O’Sullivan, said, “Against the backdrop of a highly competitive Australian telecommunications market with competitors discounting prices and sacrificing profits, Optus delivered resilient results.
We remain focused on delivering profitable growth in a rapidly changing market and driving differentiation through innovative digital services and products.”
O'Sullivan claimed the discounting activities being undertaken by Optus' two chief rivals, Telstra and Vodafone, was the primary contributor to the tightening of market conditions, but remained positive that Optus would continue to see success.
He claimed that the telco was in a strong position to capitalise on current Australian trends. "Australians like smartphones," he said. "90 per cent of our sales are now smartphones."
In other major figures: Total postpaid subscribers reached 4.89 million at June 30, 2011.
Prepaid subscribers continued to migrate to postpaid.
Total mobile customers grew from 8.7 million one year ago to 9.1 million at June 30, 2011.
Revenue in Optus's business fixed-line operations fell 0.3 per cent to $327 million, and wholesale fixed-line revenue gained 2.2 per cent to $169 million.
In the consumer and SMB (small and medium business) fixed-line segments, total revenue fell 3.7 per cent to $327 million.
Total on-net broadband customers reached 965,000 at June 30, 2011, compared to 926,000 in the prior corresponding period.
In relation to the national broadband network (NBN), Optus said it and NBN Co reached an agreement in June on the migration of Optus HFC (hybrid fibre coaxial cable) customers to the NBN.
Optus said the total value of the agreement was about $800 million, assuming all current customers migrate.
Optus and NBN Co expect the initial migration of customers to NBN infrastructure will start in 2014 and take up to four years to complete.
The Optus results came as Optus's parent, Singapore Telecommunications, posted a 2.9 per cent fall in quarterly profit to $S916 million.
Singtel's operating revenue for the three months to June 30 lifted 7.4 per cent to $S4.6 billion, boosted by mobile revenue growth in Singapore and Australia and the stronger Australian dollar.
Singtel shares on the Australian market had lost four cents, or 1.68 per cent, to $2.34 by 1418 AEST.