Singtel Optus uses MVNO to prepare for TPG competition

The operator has 1.2 million subscribers.

TPG Telecom's pending entry in the Australian telco market continues to challenge Singtel subsidiary Optus.

According to UOB Kay Hian, TPG Telecom will serve as the fourth mobile operator in Australia. Consequently, operators are building their defences.

Industry rival Telstra plans to launch Belong Mobile services to target the youth market. It also committed to invest additional capex of $3.2b (A$3b), raising capex to sales ratio to 18%.

Optus, meanwhile, hosts Amaysim as a mobile virtual network operator (MVNO) with 1.2 million subscribers, addressing the same no frills budget segment TPG is likely to target.

The company is also targeting a coverage of 98% by the end of 2018.

Singtel also gained share in the postpaid market by adding 283,000 and 54,000 subscribers in 2017 in 1Q2018. Network quality enhanced and expanded into regional Australia.

It sells bundled packages and fibre broadband for areas with strong 4G coverage.

Optus has contributed 20.9% to Singtel's profit before tax (PBT).