Optus IT services break $600 million

Optus' parent company, Singtel, reported revenue for its Australian enterprise business increased two percent to $1.57 billion for the 2016 financial year.

The ICT and managed services business continued to be the biggest earner for the enterprise division, growing revenue 11.4 percent to hit $607 million for the year.

Singtel pointed the project by Optus subsidiary Ensyst to migrate Adelaide Festival's IT infrastructure platform to a Microsoft cloud platform as a highlight. Optus is also investing $12 million with its partners to develop cyber security, cloud and internet of things capabilities.

Revenue from Singtel's other Australian enterprise business units continued to slide, including voice and mobile. Data and IP revenue dropped 9.1 percent to $333 million due to price erosion, migration of legacy data services to IP network solutions and customer-led rationalisation of services.

Mobile revenue was up by just 1 percent to $289 million. Optus said a decline in roaming and mobile termination rates resulted in revenue for the fourth quarter of 2016 to fall 5.5 percent. Voice remained somewhat stable, dipping just 0.3 percent to $346 million.

Optus took a $186 million hit to operating revenue for the quarter due to mobile termination rates dropping from 3.6 cents per minute to 1.7 cents starting from 1 January.

Earlier this week, Optus followed Telstra and Vodafone's lead by launching its voice-over-LTE service. The technology integrates voice calls into the 4G data stream rather than switching down to 3G services.

Revenue for the entire Optus group increased by four percent to hit $9.12 billion for the 2016 financial year ending 31 March. Net profit was also up seven percent to $901 million.

Optus took the opportunity to announce it signed 226,000 4G customers in the first three months of 2016, bringing the total to 4.62 million. The company also has 113,000 NBN broadband customers and 1 million broadband customers overall.

Chief executive Allen Lew said Optus was on track to transform its core business by investing in mobile networks and content services over the next three years.

“The strong results which Optus has reported over the last year reinforces that our focus on providing convergent mobile, fixed and multi-media services, combined with our innovative offers, is gaining traction with Australians,” said Lew.