Australia's second-biggest telco Optus will take a $800 million revenue hit this year because of regulated changes to what telcos can charge each for calls and text messages.
Optus' parent company, Singapore Telecommunications, on Thursday disclosed that the impact of a regulatory cut to Australia's mobile termination rates is around $800 million for the year ending March 31, 2017.
That compares to a revenue hit of $186 million in fiscal 2016.
But the sharp cuts to MTRs aren't expected to have a "material impact" on Optus' earnings before interest, tax, depreciation and amortisation, SingTel said in its annual results statement.
The Australian Competition and Consumer Commission last year slashed the price for MTRs, which came into effect from January 1.
Optus booked a 7.1 per cent rise in net profit to $901 million for the year ended March 31 after increasing its number of mobile customers and cutting operating expenses in the fourth quarter.
That compares with a net profit of $841 million in fiscal 2015.
Operating expenses in the fourth quarter dropped 14 per cent, driven by lower interconnect costs associated with reduced MTRs, plus customer costs.
Optus also posted a 32.6 per cent jump in 4G mobile subscribers to 4.67 million in fiscal 2016, with those customers now accounting for just over half of Optus' total mobile customer base of 9.3 million.
But Optus still has a long way to catch staunch rival, Telstra, which had 16.9 million mobile subscribers at the end of December.
All carriers' MTRs more than halved to 1.7 cents a minute from 3.6 cents a minute for calls, from January 1 under the ACCC ruling, while the rate for SMS fell to 0.03 cents from 7.5 cents per message.
OPTUS POSTS ANNUAL PROFIT RISE
*Net profit up 7.1pct to $901m vs $841m
*Operating revenue up 3.7pct to $9.11b vs $8.79b
*EBITDA up 5.6 pct to $2.77bn vs $2.62bn
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