Costs of marketing Apple’s iPhone – whose hefty price is subsidised by all carriers – hit Optus’s bottom line, the carrier revealed in its third-quarter results released yesterday.
Costs of marketing Apple’s iPhone – whose hefty price is subsidised by all carriers – hit Optus’s bottom line, the carrier revealed in its third-quarter results released yesterday.
Optus operational revenue was up 10 percent at $2.2 billion and it added 213,000 new mobile and wireless broadband customers in the quarter ended December 31.
Continued strong demand for the iPhone was a major factor in driving mobile revenue, Optus said.
But the carrier’s iPhone 3G initiative also reduced EBITDA (earnings before interest, tax, depreciation and amortisation) by approximately $88 million.
EBITDA ended up flat at $510 million. And after tax, etc, the net profit also ended up flat – Optus prefers the term “stable” – at $143 million.
Optus CEO Paul O’Sullivan has conceded that the new Vodafone-Hutchison joint venture, VHA, has a good chance of overtaking his company to be come the No 2 mobile phone operator in the Australian market.
“There’s a clear ambition been stated by these people to become the number two,” O’Sullivan told a media briefing called to discuss Optus’s latest quarterly result.
But, lest anyone though he was throwing in the towel, he added: “We think that that is a credible threat, but it’s something now we’re very focused on fighting.”
Optus currently holds 30 percent of the total Australian mobile market, behind Telstra’s 41 percent, according to Telsyte figures. Vodafone has 17 percent and Hutchison “3” has 8 percent – giving the new VHA 25 percent, five points behind Optus.
But in the increasingly important 3G sector, it’s a different story. Telstra still leads with 48pc, and Optus trails with 21pc. Vodafone has 11 percent and “3” 20 percent, giving VHA a total of 31 percent – substantially ahead of Optus.
However in its latest report, Optus claims the $315 million it is spending on extending its 3G coverage to 98 percent of the population will make it the only carrier capable of challenging Telstra’s network on coverage and speed. (Telstra is not actually mentioned by name – it is always referred to as “the incumbent telco” in Optus documents).
