UPDATE 2.40pm Telecommunications carrier Optus says mobile phone revenue growth has stopped in Australia after it suffered a slide in earnings.
The nation’s second-biggest telco has also called on the regulator to monitor pricing, with Telstra having spent more than $1 billion in a two-year price war to take back more than three million mobile customers.
Optus’ parent company Singapore Telecommunications (SingTel) today said the phone carrier’s earnings fell 3.2 per cent to $S1.2 billion ($A915 million) in the three months to the end of June compared to the previous corresponding period.
Revenues also dropped by the same amount to $S2.8 billion ($A2.2 billion).Optus chief executive Paul O’Sullivan said the company’s results, combined with recent results from
Telstra and struggling Vodafone showed it was a difficult time for the industry.
"We are clearly experiencing a period of significant value erosion and industry profitability has significantly declined in the last two years,” he told reporters."The actual numbers for all three players show very clearly revenue for the first time ever maybe has actually gone negative in the industry, to minus 2.5-3 per cent in terms of negative growth."
He called on the Australian Competition and Consumer Commission (ACCC) to provide a level playing field for telcos ahead of the roll-out of the National Broadband Network.
Last month the watchdog approved a move by Optus to shut down its cable network in return for $800 million from taxpayers, with Telstra negotiating an $11 billion deal including the use of infrastructure.
"We advocate that there should be an open access market for content, with all carriers able to access content for an equivalent price from a wholesale provider,” Mr O’Sullivan said.
"Whether it’s access for the fixed network, video content services, mobile or fixed it’s important that those with deeper pockets don’t get a chance to lock up content.
Telstra, the NRL and AFL recently won a court battle against Optus’s online broadcasting of Australian football and rugby league games, ensuring Telstra’s stayed the dominant online sports broadcaster.
Mr O’Sullivan also called on the ACCC to “be just keeping an eye on the nature of pricing movements in the industry and making sure competition is being maintained".
SingTel said Optus’ lower revenues were largely the result of lower equipment sales and the mandated cut in mobile termination rates from nine to six cents a minute in January.
Termination rates are calls made from a fixed line or a mobile phone that terminates on another mobile network.However, Optus’ costs were lower, following a recent restructure that included 475 job cuts in the quarter, as well as lower selling and administrative expenses.
Operating revenue from Optus’ mobile phone business fell four per cent to $A1.43 billion.
The mobile business had 9.51 million mobile customers by the end of June - a five per cent increase.
The details of Optus’ performance during the quarter came as SingTel reported a three per cent rise in first quarter net profit to $S945 million ($A720.85 million).Singtel shares closed down 5 cents at $2.55.