Update: Optus posts 5 pct fall in Q1 profit

Telecommunications provider Optus has posted a 4.9 per cent fall in quarterly profit to $161 million, describing the result as "resilient" amid intense competition and discounting.

Optus said on Thursday that apart from a one-off $18 million cost arising from the cutting of 250 jobs, underlying profit in the first quarter of its 2011/2012 fiscal year rose 2.5 per cent to $174 million.

Operating revenue for the three months to June 30 lifted 2.6 per cent to $2.3 billion, with 65 per cent of revenue generated by growth in mobile services.

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

Optus said for its current fiscal year ending March 31, 2012, it expected operating revenue and earnings to grow at low single-digit levels.

O'Sullivan said despite the current uncertain economic environment and lower consumer confidence, consumers weren't making fewer phone calls.

"Certainly, from the early stages of the global financial crisis a couple of years ago, what we saw was that phone usage was reasonably resilient because people these days tend to treat mobiles as a necessity in life as opposed to a discretionary item," he said.

"But despite that resilience, the greater level of yield sacrifice (discounting) that's going on from both Telstra and Vodafone does mean that its harder in the market to get the same ARPU (average revenue per user) for the same number of calls."

Optus said operating revenue in its mobile division rose 4.7 per cent for the quarter to $1.49 billion, compared to one year ago, underpinned by more postpaid customers.

Total postpaid subscribers reached 4.89 million at June 30, 2011.

Prepaid subscribers continued to migrate to postpaid.

Total mobile customers grew from 8.7 million one year ago to 9.1 million at June 30, 2011.

Revenue in Optus's business fixed-line operations fell 0.3 per cent to $327 million, and wholesale fixed-line revenue gained 2.2 per cent to $169 million.

In the consumer and SMB (small and medium business) fixed-line segments, total revenue fell 3.7 per cent to $327 million.

Total on-net broadband customers reached 965,000 at June 30, 2011, compared to 926,000 in the prior corresponding period.

In relation to the National Broadband Network (NBN), Optus said it and NBN Co reached an agreement in June on the migration of Optus HFC (hybrid fibre coaxial cable) customers to the NBN.

Optus said the total value of the agreement was about $800 million, assuming all current customers migrate.

Optus and NBN Co expect the initial migration of customers to NBN infrastructure will start in 2014 and take up to four years to complete.

The Optus results came as Optus's parent, Singapore Telecommunications, posted a 2.9 per cent fall in quarterly profit to $S916 million.

Singtel's operating revenue for the three months to June 30 lifted 7.4 per cent to $S4.6 billion, boosted by mobile revenue growth in Singapore and Australia and the stronger Australian dollar.

Singtel shares on the Australian market had lost four cents, or 1.68 per cent, to $2.34 by 1418 AEST.

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