Optus Business' earnings dip despite managed services wins

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Optus Business' earnings dip despite managed services wins

Earnings from Optus' enterprise business has dipped by $6 million despite gains in ICT and managed services along with a bump to the enterprise mobile division.

Optus Business raked in $386 million in revenue in the first quarter of FY18 ending 30 June, an increase of $24 million, or 6.6 percent. EBITDA was down 8.9 percent to $59 million, representing a 15.4 percent earnings margin

ICT and managed services is the largest segment of Optus Business, growing 17.6 percent to reach $173 million in revenue thanks to strong cybersecurity, cloud and unified communications sales.

Enterprise mobile sales also did well, growing 11 percent to $72 million. The telco put the growth down to strong equipment sales and higher revenue from mobile applications from a larger customer base.

The data and IP and voice divisions didn't fare as well. Voice revenue dropped 10.8 percent to $64 million due to business customers migrating to lower cost IP-based solutions, while data and IP shed $1 million in revenue, ending up with $78 million.

Optus touted wins with some its long-term customers during the quarter, expanding its suite of ICT products and services with the likes of the Australian Taxation Office and Department of Home Affairs, and acquiring new customer mobile fleets with NSW Uniting Care and the Queensland Ambulance Service.

As for Optus overall, revenue for the three-month period grew 6 percent to $2.2 billion, which the telco put down to its efforts in attracting another 66,000 new services.

EBITDA was up 2 percent to $656 million, while net profit dipped 3.5 percent to $154 million due to lower revenue from NBN migrations.

Mobile service revenue was up 2 percent to $963 million thanks to the new services, which includes both consumer and enterprise customers.

“This quarter we have leveraged our investments in networks, technology and content to create sustainable competitive advantages and positive customer growth," Optus chief executive Allen Lew said.

The telco said soccer would continue to be a key pillar of the consumer business after securing exclusive rights to air European International games and extending its rights to the Premier League.

The telco copped criticism from Australian soccer fans during the World Cup in June when Optus' live streams kept falling over, leading to Optus offering its sports subscription services up for free for the remainder of the competition and allowing SBS to air the remainder of the tournament.

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