Optus profit drops

Competition, investment in sports content take toll

Keen competition and an investment in sports content as part of the company’s move to become “a mobile-led entertainment brand” took their toll on Optus’ Q2 results.

The telco today reported an underlying net profit of $184 million for the quarter ending 30 September, down more than 20 per cent on the corresponding quarter in 2015.

Revenue dropped from $2.31 billion to $2.11 billion — an 8.7 per cent decline year on year decline. EBITDA was down 10.3 per cent to $633 million. Optus said the decline in operating revenue was a result of the Australian Competition and Consumer Commission’s cut to mobile termination rates as well as higher service credits from device repayment plans.

Optus’ parent company Singtel said that investments in sports content and heightened competition in Australia were responsible for the hit to EBITDA.

Optus said it expected mobile service revenue to decline by “mid teens for the financial year ending 31 March 2017”.

For the half year, net profit was down 16.4 per cent, from $426 million in the first half of FY15 to $356 million.

“These first half results reflect Optus’ efforts to drive customer growth through differentiated content,” Optus CEO Allen Lew said in a statement.

“Optus has successfully deepened its engagement with customers, achieving a record quarter of customer growth for our branded mobile business, and strong demand for Optus’ unique entertainment content.”

“Optus is seeing signs that its focus on product innovation and network investment is having a positive effect on customer advocacy, with our Market Net Promoter Score (NPS) improving 6 points to +12,” the CEO said. “This is our highest score since we began tracking NPS and indicates that our customers have noticed the improvements in our mobile and fixed networks, and are enjoying Optus’ range of products and services.”

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