Optus Calls Best Mobile Numbers In Two Years

The Age

Thursday May 15, 2008

Jesse Hogan, Telecommunications Reporter

OPTUS' declining share of the domestic mobile phone market may be set for recovery following a positive start to 2008.

The No. 2 telco signed 135,000 new mobile customers in the three months to March 31 - its best quarterly result in two years - to lift its total customer base to 7.14 million.

The SingTel-owned company announced an underlying profit of $552 million for the year to March 31 - 4.6% higher than in 2007 - which outpaced the 3.8% rise in revenue to $7.76 billion.

"This is the first time (since) 2005 that we've shown an expansion in our operational EBITDA, and reflects a performance by Optus which is contrary to many of the trends of the industry," chief executive Paul O'Sullivan said.

But Optus' results were overshadowed by the performance of SingTel's associates - telcos it partly owns - in Asia. Those associates, such as Bharti in India and Telkomsel in Indonesia, added 14 million new mobile customers in the March quarter, and now provide 44% of SingTel's overall earnings.

In Australia, Optus managed to attract 231,000 higher-spending post-paid mobile customers, compared with 44,000 in the previous year, by aggressively promoting its capped-price plans. The impact of those plans - taken up by 50% of new or recontracted customers - resulted in operational earnings from the mobile division slipping 4.6% for the quarter, to $378 million, and 6.5% for the year, to $1.43 billion.

Optus also hinted at legal action against the Federal Government to reclaim the $20 million it spent developing plans for the subsidised Opel rural broadband network, which Communications Minister Stephen Conroy cancelled last month.

"We have incurred close to $20 million and we will be looking to recover some of those costs from the Government," Optus chief financial officer Jeann Low said.

Mr O'Sullivan said he had given a recommendation to the SingTel board about what the company should do about the cancelled Opel contract, and expected the board would reveal its decision within a few weeks.

"We think it's important that we do everything we can on behalf of our shareholders to show a responsible approach to any monies we expended out of the program," he said.

SingTel's Australian-listed shares were unchanged at $2.91.

© 2008 The Age

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