Optus transformation on track, CEO says

Telco reports full year net profit of $901 million

Image credit: Optus

Image credit: Optus

Optus’ transformation to take it beyond telecommunications is on track, according to its CEO, Allen Lew

“Last year Optus started on a three-year journey that will take us beyond the boundaries of what it is to be a traditional telecoms company,” Lew said today during a briefing on the telco’s full year results.

“We are creating a point of difference over our competitors and thinking differently about the experiences we create and share with customers. During the quarter Optus made progress on a number of strategic initiatives that underpin this strategy.”

Those initiatives included rolling out a new look and feel for the Optus brand to signal that it had evolved into “a mobile-led entertainment brand”.

The telco also made further investments in content, including announcing in March a partnership SBS to allow Optus to transmit FIFA World Cup-related content.

Optus in November last year that it had run the exclusive Australian broadcast rights to the English Premier League. As the English Premier League season draws closer Lew said the telco is investing in its mobile and fixed networks to ensure they keep pace the demand placed on them by video traffic.

Optus reported annual net profit of $901 million — up 7 per cent — for the year ending 31 March. Operating revenue grew 4 per cent to $9.12 billion and EBITDA increased 6 per cent to $2.77 billion.

Optus EBITDA for the quarter ending 31 March grew 2 per cent to $739 million, the telco reported today. Underlying net profit was up 10 per cent to $273 million.

Operating revenue for Q4 dropped by 9 per cent, however. Optus attributed the decline to an Australian Competition and Consumer Commission decision to cut mobile terminating rates for calls and SMS messages (the charges levied by carriers for receiving calls and messages on their networks).

The ACCC decision, finalised in August, cut carriers’ mobile call termination rates to $0.017 per minute and SMS rates to $0.03 per message (down from $0.036 per minute and $0.075, respectively).

Optus said that the decision also helped cut operating expenses by 14 per cent in Q4.

At the end of Q4, Optus had 4.68 million customers on its 4G network, representing a year-on-year increase of 33 per cent.

Optus added 25,000 National Broadband Network customers in the quarter, bringing its total NBN base to 113,000. Overall, the telco has 1.07 million fixed broadband customers.

There are “clearly good trends in today’s results,” Optus CEO Allen Lew said.

“We are pleased with our overall EBITDA and net profit performance. As we head into a new financial year we have a content platform which will drive further growth in our business throughout 2016-17.”

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