Question

optus is cost leadership or product differentiaton ?why?

Answer 1

An ever-growing number of always connected people are placing unprecedented demands on business today. Most organisations recognise that the rules have changed. To meet the expectations of today’s digital citizens we need to embrace digital transformation. Technology is the foundation that enables things like agility, innovation, and collaboration – the elements that collectively drive growth and competitive advantage.

Optus today reported quarterly EBITDA of A$633 million, which was affected by device repayment plan service credits and higher costs associated with the launch of Optus Sport. Optus’ suite of entertainment content was a key driver of mobile customer growth this quarter. With its compelling range of offers, including data-free TV and movies, music, and the Premier League, Optus’ branded segment had a record quarter of growth, adding 107,000 postpaid handset customers. Across all business segments, Optus gained 84,000 mobile customers during the quarter, bringing the total mobile base to 9.42 million. Net profit for the quarter was A$184 million and free cash flow for the quarter was A$221 million. Operating revenue declined 9.0% and was driven by the Australian Competition and Consumer Commission’s (ACCC) regulated reduction in mobile termination rates, and higher service credits associated with device repayment plans. From 1 January 2016, mobile termination rates declined from 3.6 cents per minute to 1.7 cents per minute for calls, and 7.5 cents to 0.03 cents for SMS. Excluding the impact of mobile termination rates and device repayment plan credits, postpaid average revenue per user (ARPU) increased 3% year-on-year. In Mass Market Fixed, operating revenue increased 6%, reflecting strong demand for Optus’ home broadband entertainment bundles and NBN plans. At the end of September 2016, Optus had 164,000 broadband customers on the National Broadband Network, up 130% year-on-year. Optus now has a total of 1.11 million broadband customers.

The growing entertainment portfolio was enhanced by further investments in Optus’ mobile and fixed networks. During the quarter, Optus continued to focus on enhancing network capacity and extending its 4G footprint to 95.7% of Australians. For the 13th consecutive month, major streaming providers, Netflix and Stan, ranked Optus as Australia’s leading ISP for content streaming.

Optus is seeing signs that its focus on product innovation and network investment is having a positive effect on customer advocacy, with our Market Net Promoter Score (NPS) improving 6 points to +12. This is our highest score since we began tracking NPS and indicates that our customers have noticed the improvements in our mobile and fixed networks, and are enjoying Optus’ range of products and services,” Mr Lew said.