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Mobile gains fail to offset Optus profit dip

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Mobile competition is set to intensify in the year ahead with renewed network investment and significant discounting across the market, claimed Optus chief executive, Paul O'Sullivan.

Optus posted a 5 percent fall in quarterly profit, while its mobile revenue rose 5 percent in the quarter to $AU1.49 billion.

Revenue across business and wholesale, and consumer and SMB segments remained stable. EBITDA was up 1 percent to $AU560 million, driven by contribution from all segments and continuing cost management. Underlying net profit grew 3 percent to $AU174 million, excluding the impact of workforce restructuring.

“Against the backdrop of a highly competitive Australian telecommunications market with competitors discounting prices and sacrificing profits, Optus delivered resilient results,” O'Sullivan said.

Strong postpaid customer growth drove mobile activity, with 113,000 postpaid net additions this quarter. The number of 3G customers increased to 5.29 million, up 4 percent from the last quarter. O'Sullivan warned that mobile would see an increased tussle for the consumer.

"When your main competitor takes a billion dollars off their bottom line and then gives guidance that says they are not going to try to recover that, then that tells you it is going to be very competitive," he said.

Adding that when a smaller competitor is offering $AU45 infinite plans, “then that is also going to make sure it is a very competitive market.” O’Sullivan forecast that further growth would come from digital service innovations.

Optus’s ramp up of digital services and products include the launch last month of Optus TV Now, enabling customers to schedule, record and playback any of the 15 free-to-air television channels from their compatible 3G mobile devices or PC.

As part of its strategy to develop a suite of converged video services, Optus also announced plans to sell the Fetch TV supported IPTV service accessible across multiple devices, scheduled for launch in the second half of 2011.

Meanwhile, the profits of Optus parent, Singapore Telecommunications, fell by 3 percent, mainly due to the poor performance of its Indian operations. ®

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