Optus decides the existing customer comes first

Tough mobile market conditions have prompted Optus to change direction on its growth strategy, with the nation's second-biggest telco focusing on retaining its existing customers rather than chasing new subscribers. Over recent years, Australian telcos had experienced fast-paced growth in mobile subscribers. But with mobile handsets now outnumbering people, there is little room for further increases.

Optus consumer business division head Vicki Brady has revealed the company's prime focus is improving returns from their existing customers. She said the future was "about looking after existing customers, ensuring we give them good reasons to be loyal and stay with us".

Telstra is the only telco making headway in attracting new customers, largely through its first-mover advantage through the launch of its new high-speed 4G network.

The Singapore Telecommunications-owned Optus added only 53,000 new customers over the six months ending December. Telstra attracted more than 600,000 customers in the same period, about half of which were new 4G customers.

Ms Brady said the launch of new phones such as the iPhone 5 used to be a major promotional event to attract new customers, but instead Optus chose to use it as an opportunity to retain its existing customers. "Last year, we took the completely opposite approach. We heavily allocated those [iPhone 5s] to our existing customers [about 80 per cent]."

The company is also looking to have better control over its retail distribution network by building new Optus-branded shops and terminating resell arrangements with retailers such as Telechoice and Allphones.

"As part of our transformation, we are actually moving into a model where Optus will own more of these stores," she said.

Ms Brady admitted the telecommunications industry had a reputation for bad customer services, noting "it is clear we are not meeting customer expectation generally across our industry today". A recent Optus survey showed the industry ranked second-last in terms of customer service.