Optus profit slumps 36.6% in Q2
Optus has reported a 36.6% year-on-year decline in net profit for the September quarter to $105 million, partly as a result of the financial impact of the company’s recent job cuts.
The telecoms service provider reported total second quarter operating revenue of $2.19 billion, up 5.4% year-on-year, with mobile revenue growing 14% on the back of higher handset sales.
But mobile service revenue fell slightly to $943 million due to higher competition and the increase in sales of SIM-only plans.
Net profit was also impacted by workforce restructuring charges — Optus cut around 440 jobs during the quarter in the second round of layoffs this year — as well as the temporary loss of income from nbn migration payments resulting in nbn co’s decision to suspend new activations over the hybrid fibre coaxial (HFC) component of the network.
nbn co arranged to acquire components of Optus’s HFC infrastructure and implement it into the nbn’s multitechnology mix as part of an $800 deal with Optus to migrate its customers to the nbn.
But the company was forced to reverse course after finding that a significant portion of the HFC network was in poor repair and not fit for purpose, and had mostly decided to drop HFC in favour of fibre to the distribution point (FTTDP).
In November last year, nbn co suspended the rollout of the HFC component of the network, after determining that an unsatisfactory percentage of the roughly 370,000 premises that had been connected to the technology to date had been experiencing technical difficulties or inadequate quality of services. This suspension is now progressively being lifted.
Consumer fixed line revenue for the quarter fell 4% as a result of the suspension of the nbn migration revenues. Excluding this impact, revenue from the segment would have grown 2%.
Optus added 33,000 nbn customers during the September quarter, ending the period with 516,000.
The company also added 87,000 postpaid mobile customers during the period, but lost 120,000 prepaid customers, taking its total mobile customer base to around 18 million. The company’s 4G population coverage increased to 97.2%.
Recent analysis from OpenSignal suggests that Optus has the highest 4G availability of Australia’s mobile operators, but Telstra is leading for download speed and Vodafone has the lowest latency.
Optus meanwhile used the announcement of its second-quarter results to reveal plans to launch a 5G fixed wireless service in Canberra and Brisbane in January, and extend the service to other capital cities by March.
Optus has been trialling 5G in Sydney, and demonstrated the technology during the most recent Commonwealth Games on the Gold Coast.
The first 5G smartphones aren’t expected to reach the market until later in 2019 or 2020.
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