Back to basics: Optus switches focus to fixed lines

Optus is renewing its focus on its fixed-line business after experiencing slow mobile subscriber growth in a flat market. The country's second-largest mobile operator has appointed a telco industry veteran, Martin Mercer, to lead the fixed-line strategy as the national broadband network is being built.

"It is about the time to shine a bright light back on the fixed business and grow it with the same focus, intensity and passion that we have grown the mobile business over the years," Mr Mercer said.

Optus has experienced substantial growth in the mobile market over recent years, but has now stalled. It added just 53,000 new customers in the past six months, while Telstra had attracted more than 600,000 customers in the same period.

As a result, it is looking to its fixed-line business for growth.

"For a long time, Optus has become, in many respects, a mobile company first and a broadband company second," Mr Mercer said. "Under Kevin's [Optus chief executive Kevin Russell] leadership, he recognises that we need to manage the two parts of our business equally."

Mr Mercer sees the national broadband network as the key to fixed-line strategy and business growth opportunity. "NBN passes a lot of households where we don't have infrastructure. It significantly expands the accessible market," he said. "In many of these areas, we have mobile customers but no ability to provide broadband services."

The $37 billion national fibre network afforded a great opportunity for Optus to "cross-sell" to customers who already had mobile services with the telco.

Mr Mercer, who was chief executive of Vividwireless before joining Optus, said price would not be an important differentiator in the national broadband network world, where all internet services providers are able to access the network on equal wholesale terms. "The interesting thing about NBN is price is a lever that is going to be hard to pull. If your strategy is going to be based on price, then you are going to find it challenging in a NBN environment."

Rather, "customer experience" and "bundling" would be at the heart of Optus' national broadband network strategy, he said.

"We don't do bundling as well as we should and we are getting better," he said.

Another challenge facing Mr Mercer is to grow Optus' fixed line customers on its hybrid fibre-coaxial network, which connects about 2.4 million premises. The telco has about 500,00 customers on this network at moment.

"Part of my challenge now is to accelerate our performance in fixed broadband and to connect more customers to our HFC network. That is the real question of focus," he said.