Optus Sees Slight Decline in Revenues on Lower Sales and Regulatory Impacts
Australia's Optus has reported a 3 percent decline in its quarterly revenues, due to lower equipment sales, the mandated reduction in the mobile termination rates and service credits associated with device repayment plans introduced from October 2011.
In recent months, Optus has restructured its workforce and cost base, including a headcount reduction of 475 in the quarter, and lowered device subsidies. As a result, customer acquisition costs declined 19 percent compared to a year ago.
Total operating expenses decreased 3 percent, mainly driven by lower selling and administrative expenses, cost of sales and traffic expenses, partially offset by higher staff costs.
During the quarter, Optus also completed the acquisition of the Vividwireless Group and extended its site sharing agreement with Vodafone Hutchison Australia, which will result in an approximate 20 percent increase in mobile sites across the Optus network.
In Mobile, operating revenue was down 4 percent to A$1.43 billion. Excluding the impact of service credits on device repayment plans, outgoing service revenue grew 2 percent. EBITDA margin was stable on lower traffic costs and reduced selling expenses.
Optus continued its postpaid customer growth momentum with net additions of 88,000 for the quarter. Postpaid customers comprised 56 percent of the total base, up 2 percentage points from a year ago. Yield management initiatives, including reducing prepaid device subsidies, contributed to a decline in prepaid customer base of 65,000 this quarter, bringing Optus' total customer base to 9.51 million as at 30 June 2012.
The number of 3G subscribers rose to 6.82 million, a 3 percent increase from a quarter ago, and included a base of 1.57 million wireless broadband customers.
In Business and Wholesale fixed, overall revenue increased 1 percent from satellite, ICT and managed services. EBITDA was stable compared to the same period last year.
In the Consumer fixed business, the number of on-net broadband customers totalled 993,000 as at 30 June 2012, up 15,000 from a quarter ago. The lower ARPU from increased broadband data inclusions and lower telephony usage led to a 6 per cent decline in on-net revenue. EBITDA, however, grew 11 per cent and EBITDA margin improved 3 percentage points due mainly to lower traffic costs from the mandated reduction in mobile termination rates.