Release Date: August 30, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Mobile service revenue increased by 7.2%, driven by higher consumption and recent network investments.
- Fixed broadband AMPU increased by 6.3%, with strong growth in fixed wireless offsetting competition in the NBN market.
- Successful migration of Lyca Mobile to TPG's network, marking a significant MVNO contract win.
- Operating EBITDA is sustainably growing, with working capital moving favorably and CapEx past peak levels.
- Continued progress in strategic initiatives, including a proposed regional sharing agreement with Optus and business simplification programs.
Negative Points
- Inflation impacts remain challenging, leading to the removal of approximately 120 roles to deliver operational efficiencies.
- Slower mobile subscriber growth attributed to lower international arrivals and aggressive handset discounting by competitors.
- Depreciation and amortization costs are increasing, impacting earnings per share.
- NBN market remains highly competitive, with new entrants growing at low margins through aggressive promotions.
- Enterprise, government, and wholesale segments face challenging market conditions, impacting overall performance.
Q & A Highlights
Q: Can you explain the difference in asset perimeter in the current Vocus negotiations versus the transaction proposed last year?
A: We have reengaged in discussions with Vocus, but there is no further update on the specifics of the asset perimeter at this stage. More details will be provided as discussions progress.
Q: Could the timing of your price increases in January and March, compared to Telstra and Optus in August, have impacted postpaid subscriber growth?
A: The timing of plan refreshes does have an impact, but the main drivers for the decline in postpaid subscribers were the decrease in international inflow, cost-of-living pressures, and increased handset discounting by competitors.
Q: What are the key drivers for the expected $30 million increase in EBITDA in the second half?
A: Key drivers include the full period impact of recent price increases, continued focus on cost efficiencies, improving trends in mobile trading, growth in fixed wireless access (FWA), and seasonal factors such as outbound roaming and the upcoming iPhone launch.
Q: Can you confirm if you are still talking to other parties besides Vocus?
A: We cannot confirm or deny discussions with other parties at this stage.
Q: Why has postpaid ARPU remained flat despite price increases?
A: Postpaid ARPU is influenced by seasonality, particularly roaming, and the timing of plan refreshes. Comparing ARPU across the same season provides a clearer picture.
Q: What is the outlook for enterprise and government revenue in 2025 given recent contract wins?
A: We will provide detailed guidance in February, but we expect continued growth driven by key contract wins and market opportunities.
Q: How do you plan to compete in the MVNO space following the Lyca contract win?
A: We see opportunities in partnering with brands that give us access to market segments we wouldn't normally reach and working with distributors that include mobile in their product offerings.
Q: What is the impact of seasonal roaming on postpaid ARPU?
A: Seasonal roaming contributed approximately $0.40 to the difference in postpaid ARPU between the first and second halves.
Q: How do you plan to stabilize NBN subscriber growth while maintaining profitability?
A: We aim to stabilize NBN subscribers by balancing competition in the NBN market with our on-net services, which offer better value and flexibility.
Q: How does the focus on cost efficiency contribute to improved EBITDA momentum?
A: We benchmark well on costs relative to competitors and have taken actions to reduce OpEx growth. We expect a flatter cost profile in 2025 and continue to look for opportunities to optimize spending.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
