Mobiles, broadband improve Optus profit

Australia's second largest telco Optus has posted a 22 per cent rise in second quarter net profit with continued strength in mobile phone and broadband revenues.

Its parent company Singapore Telecommunications Ltd, which reported 10 per cent growth in second quarter net profit, said it had not made a decision to sell a minority stake in its Australian subsidiary.

"I really don't know where that came from," SingTel chief executive Chua Chua Sock Koong said on Wednesday in response to speculation of a sale of a minority Optus stake.

"Certainly no decision has been made on listing Optus."

The group regularly reviews its investments in its subsidiaries, and any decision to sell or float those shares would be made in the best interests of shareholders, Ms Chua said.

Optus reported a net profit of $152 million in the three months to September 30, up from $125 million in the corresponding period last year.

Net profit for the first half of the fiscal year was $291 million, 18 per cent higher than $247 million in the same period last year.

Revenue from mobile services rose by 12.2 per cent in the second quarter to $1.38 billion, the fourth straight quarter of double-digit growth for Optus.

Mobile revenues contributed 62 per cent of Optus' $2.22 billion in total second quarter revenue.

Optus chief executive Paul O'Sullivan said the company believed it had continued to increase its market share against its competitors.

"Clearly we are outperforming the average," he said.

Telstra's latest financial report shows mobile services revenue growth of 7.6 per cent to $3.4 billion in the second half of the 2008/09 financial year.

The takeup of smartphone devices such as the iPhone helped drive the growth in mobile revenues, Mr O'Sullivan said, while the increasing trend of browsing the internet on such devices is also producing greater revenues.

Wireless broadband has more room to grow, he said, with only about 10 to 15 per cent of Australians currently owning a wireless broadband device.

While corporate fixed-line call revenues were weaker in the period, Optus' overall business and wholesale fixed-line revenues grew by three per cent due to improved IT services revenues.

"You could separate our view of the economy as being a very good consumer environment at the moment, in terms of the way that we're performing, but in the corporate market you can see some of the effects of the slowdown in the economy," Mr O'Sullivan said.

Consumer and small and medium business fixed-line revenues continued to fall, down two per cent in the second quarter, as growth in internet services was offset by falling call revenues.

The telco still expects full year operating revenue to grow at single-digit level, while earnings are forecast to grow at a low single-digit level.

Meanwhile, Mr O'Sullivan said Optus was working cooperatively with the federal government in relation to the proposed national broadband network, but said the detail of conversations would remain confidential.

SingTel shares gained six cents, or 2.65 per cent, to $2.32.