Optus: mobile in consolidation phase
Tough mobile market conditions has 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 the number of mobile subscribers. But with mobile handsets now outnumbering people in Australia, there is little room for further large increases.
Optus' consumer business division head, Vicki Brady, last week said the company's prime focus was improving returns from their existing customers.
"We chased new customers over a long period of time," Ms Brady said. "But very clearly for us the last 12 months have been about looking after existing customers, ensuring we give them good reasons to stay with us.
"Historically, we were absolutely focused on new customers and we completely changed that."
Telstra is the only telco making headway in attracting new customers largely because if has the first-mover advantage with its new high-speed 4G network.
The SingTel-owned Optus added only 53,000 new customers in the six months to December 31, while Telstra attracted more than 600,000 customers in the same period, about half of whom were new 4G customers.
Ms Brady said the launch of new phone such as the popular 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 completely the opposite approach," she said. "We heavily allocated those [iPhone 5s] to our existing customers. [about 80 per cent]."
The company also seeks to have better control over its retail distribution network by building new Optus-branded shops and terminating re-sell 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 and actually employ people," she said.
Ms Brady admitted that the telco industry had a reputation for bad customer service, noting: "It is clear we are not meeting customer expectations generally across our industry today."
A recent Optus survey shows the telco industry ranked the second-last in terms of customer services out of five industries.