iPhone gamble causes Optus losses

Optus’ big gamble on the iPhone to increase their share of the 3G market has resulted in a $44 million loss in profits for the telco.

Optus’ big gamble on the iPhone to increase their share of the 3G market has resulted in a $44 million loss in profits for the telco.

While total figures for the period have not been released, Optus reported EBITDA (earnings before interest, tax, depreciation and amortisation) of $477 million for the same period last year.

The iPhone has had a similar impact on Optus’ parent company, Singtel, with Singtel reporting that the iPhone campaign reduced its earnings by $S26 million ($26.3 million) in Singapore.

Still, Optus is claiming a victory with the campaign – with 55 per cent of its iPhone subscribers being new customers. According to reports in the Australian IT section, Optus government and corporate affairs director Maha Krishnapillai said “the acquisition costs had been calculated into the cost of customer contracts and that each subscriber would return a profit to the company.

“We think it’s pretty exciting news. We’ve captured the lion’s share of iPhones in Australia and we think we’re heading toward that throughout the region,” Mr Krishnapillai said. “It does have a downside in the sense that there’s an upfront acquisition cost. It’s a short-term hit, but we think it’s a really good investment for long term growth of iPhones.”

Source: Australian IT

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