Telstra and Optus – nbn pain, falling ARPUs and the fight for 5G supremacy

On 14th February 2019 Optus and Telstra announced their latest earnings.

Both revenue and earnings remained subdued as subscriber growth was offset by a slowdown in NBN migration payments, and continuing pressure on mobile ARPUs.

5G and Fixed Wireless remain key growth areas going forward.

FY18 Telstra key financials (A$mn)

Telstra and Optus reported earnings on 14th February 2019. While Telstra reported its 1HFY19 earnings, Optus reported its 3QFY19 earnings. In this report, we have analysed some of the key trends observed across the two major telcos.

Telstra announced its first half FY19 results on 14th February 2019, with performance roughly in line with expectations and guidance given the challenging market and the pressures of the NBN. Fixed line services continue their decline, while mobile is the only major product segment showing growth, but no longer offsetting losses in other areas. Its T22 strategy is also well under way, with organisational transformations, cost reduction plans and simplification of product lines having already had an impact on financial performance and customer satisfaction.

Optus results announcement had the following key highlights:

  • Revenue of A$2,419mn, up 4.3% over 3QFY18 driven by higher mobile equipment revenue as consumers moved to premium high-priced handsets

  • Operating EBITDA declined 9% to A$664mn driven by lower NBN migration payments and higher operating expenses

  • Net profit of A$172mn, down 32% over 3QFY18

  • 3QFY19 Optus key financials (A$mn)

“This article is an extract of a report published by our sister company Venture Insights. To enquire about becoming a subscriber, please contact Nigel Pugh.”