Optus revenue down despite customer growth, driven in part by English Premier League
Optus has seen its revenue dip 14%, year-on-year, during the final three months of 2016 despite an increase in mobile customers driven by the telco’s English Premier League (EPL) Offering.
For the quarter ending December 31, 2016, the company reported an earnings before interest and tax of $307m, down from $356 for the same period in 2015.
Optus surprised many in market when it secured the rights to the EPL from Fox Sports for $189m for three years, with the telco announcing later a suite of apps and channels available only to Optus customers that it would stream the matches on.
Acquiring the rights to the EPL in part helped the telco sign up 153,000 new mobile customers in the three months to December 31, taking its total to 9.57m.
While this was up on the 12,000 extra customers Optus signed up in the final months of 2015, net profit for the company was down 17.3% on the same quarter the previous year.
Australia’s second largest telco reported a net profit for the final three months of 2016 of $188m, down from $227m in 2015.
The company said the profit was “affected by device repayment plan service credits and one-off items in the corresponding quarter last year”.
It is the first straight quarter in which Optus has posted falling profit.
Optus’ operating revenue declined by 9.3% with the telco blaming the Australian Competition and Consumer Commission’s (ACCC) mandated reduction of industry mobile termination rates, higher service credits associated with device repayment plans and one-off items in the corresponding quarter last year.
Allen Lew, Optus chief executive officer, said in a statement: “Optus is responding to moderating market conditions with an intense focus on innovative products, unique entertainment offers, and a strong network proposition.”
I’ve seen the numbers. Telstra is the biggest loser in respect to mobile interconnect charges. Optus is scrambling to excuse poor leadership and to gloss over the overinflated EPL payments. In the race to be ‘relevant’ through content, they’re failing to invest in the core – great customer experience and network quality. How long until the next restructure is announced? It’s certainly being discussed.
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Beware of bogus data charges from optus, common reports of customers being charged excessively for data they didnt use.
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On those figures, Optus gained 140,000 extra customers at a cost of $189m for the rights and an unknown cost of developing platforms etc. The extra 140,000 is likely to be a one-off as anyone who was going to sign up will have by now. I don’t know the math but is $1350 payment to get customers who will probably equate to sales of $3600 over the three year period a good deal?
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