Optus has lifted its profits over the last financial year despite a decline in revenues.
How? Through “cost control”, including job cuts.
Last Thursday, 15 May, Optus released its annual results for its financial year ended 31 March 2014. For the year, operating revenue was down 5.2 percent to $8.4 billion, while net profit was up 14.6 percent to $835 million.
The result, Chief Officer Paul O’Sullivan says “reflects Optus’s strategy of strong cost management and yield improvement”. Staff costs were reduced by 7.4% in part of an ongoing job cuts programme which has seen over 1500 positions lost since restructuring of the company began in 2012.
But continuing to cut jobs can’t provide any long-term answer to the question of Optus’ future. It needs to increase revenues and to do that its parent company, SingTel, needs to invest more aggressively in the Australian market.
Optus’ investment in its 4G network is already bearing fruit, with the company adding 785,000 4G customers over the financial year. It has also recently consolidated its position in the local satellite market by winning the 15 year contract to operate the two NBN satellites due to come on stream next year. The roll-out of the NBN should also provide it with new market opportunities.
These developments point a way forward for Optus that does not rely on cutting Australian jobs – while sending profits home to Singapore.