Optus cuts headcount by 14 per cent in a year

Telco grows mobile base, but revenue per user drops

Optus reduced its head count by 14.3 per cent in the 12 months to 31 March, cutting its workforce from around 8500 to just under 7300. The telco today revealed that as a result staff costs were down 15.2 per cent compared to the prior year.

The telco’s parent company Singtel revealed that across the group headcount was down 6 per cent to around 24,100.

Optus said it has continued to increase the number of mobile customers on its network, but average revenue per user (ARPU) declined compared to the prior year. During the 12-month period Optus added a net 379,000 post-paid mobile subscribers, with 126,000 of those in its fourth quarter.

Overall Optus mobile revenue grew 10.9 per cent year on year to $5.7 billion, Singtel said. Postpaid ARPU was down 3 per cent to $42, with prepaid ARPU down 8 per cent to $18.

In Q4, Optus mobile service revenue “was stable with strong postpaid customer growth offset by lower ARPU from heightened competition,” Singtel said. The telco suffered a 2 per cent decline in postpaid ARPU in the quarter, “due to the higher mix of SIM-only plans and data price competition.”

For the year, Optus revenue for the mass market fixed segment, which includes voice, broadband and pay TV, was steady at $1.42 billion.

Overall for the year Optus operating revenue grew 5.7 per cent to $9.1 billion. EBITDA was down 0.9 per cent to $2.7 billion, while underlying net profit dropped 8.1 per cent to $716 million.

Optus attributed the drop in net profit to several factors, including the NBN Co decision in late 2018 to pause the rollout of hybrid fibre-coaxial (HFC) services. Other factors cited by Optus were higher depreciation and amortisation costs and “exceptional items as Optus continues to transform its business”.

Optus’ enterprise revenue was down 2.7 per cent to $1.4 billion for the year, while EBITDA dropped 14.8 per cent to $216 million. In Q4 revenue dropped 7.6 per cent to $342 million, with Singtel citing “double-digit decline in fixed voice and significant slowdown in customer spending especially in the key government and financial sectors on delayed contract awards”.