Optus bemoans a lack of identity

Jeff Whalley
May 15, 2013
Herald Sun

OPTUS chief Kevin Russell says the brand has lost its punch with consumers.

Speaking as Optus revealed its net profit had fallen for the first time in five years, Mr Russell yesterday vowed the telco would again regain its challenger status.

“In terms of what we see today, the Optus brand in the marketplace is less differentiated than we would like to be,” he said.

The group’s net profit clocked in at $728 million for the year to March, compared with $787 million a year earlier.
Customers spent $40 million less on smartphones as Optus cut subsidies that had been used to bolster sales numbers.
The telco revealed revenue fell after it introduced “usage alerts”, informing customers when they were near their data-use limits, and caps on excess usage beyond plan allowances.

Mr Russell is undertaking a radical overhaul of the telco as growth in customer numbers slows.

He is chasing more earnings from existing customers who are increasing their consumption of data on mobile devices, such as smartphones and tablets.

“We are committed to a sustainable business model and to rekindling the spirit of the Optus brand,” he said.

While net profit fell, earnings before interest, tax depreciation and amortisation climbed 1 per cent to $2.4 billion as Optus reaped the benefits of a cost-cutting drive.

The group has axed 1200 job cuts in the past year.

Revenue has been squeezed in a competitive mar- ket for mobile customers, dropping 4.6 per cent to $8.93 billion.
The telco lured 27,000 new mobile customers in the three months to March and 103,000 for the year.

It now has just over 9 million customers.

Mr Russell also revealed for the first time that Optus has 785,000 4G smartphone subscribers, after launching services nine months ago.

Telstra, which launched 4G services in September 2011, has more than two million customers.

Optus’ parent Singapore Telecommunications has raised its final dividend by 11 per cent to S10c a share.

Singtel also plans to spend $S2 billion ($1.64 billion) on acquisitions to boost growth after the group’s fourth-quarter profit fell 33 per cent.