Optus reported its first quarter results on 14 August, the same day as Telstra. They paint a picture of a company that has not yet successfully repositioned itself in the rapidly changing local and international market.
Optus reported a 1.8% decline in net profits with the negative result attributed to one-off restructuring costs (including redundancies). Without those costs, profits would have been up 12.3%.
That’s not as healthy as it sounds, though. The result is based more on cost cutting than on revenue growth. Revenues in fact have fallen by 2.8% over the last 12 months. Mobile subscriber numbers declined by 126,000 over the same period.
On the positive side, Optus’ 4G subscriber base more than doubled year-on-year to hit 2.43 million – more than a quarter of the total.
That growth may have been achieved at the expense of revenues through new data offers such as My Plan which cut down data usage fees. But by expanding its base Optus hopes to be in a better position to reap the rewards of its 4G network investments further down the track.
In the meantime, though, Optus is relying on cost reductions to stay afloat – and that always means job losses with all the pressure on service levels that brings. This is self-defeating strategy which Optus can ill afford in competitive market conditions.