Optus profits down, investment up
Optus says it will spend an additional $1.5 billion on its mobile network over the next 12 months as it moves both to extend regional coverage and add capacity in metropolitan areas.
The move comes despite Optus announcing a 12% fall in profits for its 2016-17 financial year (which ended in March) and follows the recent (draft) decision of the Australian Competition and Consumer Commission (ACCC) not to declare domestic mobile roaming.
Both Optus and Telstra had argued strongly that giving the ACCC the power to regulate the price mobile carriers charged each other for connecting to their networks would act as a disincentive to those carriers’ investing in network extensions and upgrades.
They have both now put their money where their voices have been, with Telstra also flagging further extensions to its 4G network to achieve 99% population coverage by later this year if the ACCC decision is confirmed.
Meanwhile, though, despite growth in its mobile customer base, especially in 4G, and in its broadband customer numbers (up 7% over the year), Optus earnings have gone backwards, with revenues taking a hit from lower mobile termination rates and with the costs of the English Premier League content deal still weighing on the balance sheet.
Optus, in short, is still making heavy weather of it as it seeks to negotiate the challenges of operating in an increasingly data-centric market, including those posed by the impending transition to 5G mobiles networks.
For its employees’ sake it is to be hoped it can make good use of the breathing space provided by the ACCC roaming decision.
