Sunday, February 12, 2006

Ovum: Optus holds on, but at a price

David Kennedy at Ovum writes about Optus' third quarter results, where telecommunications revenues were "up 4.6% from this time last year, but corresponding EBITDA margins shaved by 2.1% in an increasingly competitive market. Expenses saw a 5.6% year-on-year rise, as interconnect charges and other outpayments rose faster than revenues over the last twelve months."

Kennedy noted "an acceleration in Mobile revenues, with strong quarterly growth of 7% compared to a 3.3% figure year-on-year. However, there was also a decline in EBITDA margins to 37%, down from 39% a year ago, as the share of customers signed up to Optus' aggressively-priced bucket deals rose to 14% from only 2% a year ago. Churn rate dropped to 1.2% from 1.5% in Q3 2005, and loss of market share has been halted at 32%. Optus could not grow its share, but subscriber numbers rose on the back of total market growth to 212,000."

He concludes that "so far, last October's bucket pricing promotions have halted mobile market share loss, but haven't translated into market share growth. Nor has Optus' ULL network had time to roll out. It's still early days on these initiatives, and the next two quarters' results will bring a clearer picture."