Australian telco Optus, a subsidiary of the ASX-listed Singapore Telecommunications (ASX: SGT), lost 38,000 mobile subscribers in the three-months to September 2013. It is therefore no surprise, the recently appointed managing director of networks, Vic McClelland said that he wanted to alter Optus's mobile strategy to focus on strengthening the telecommunication company's coverage in the 300 most high-demand areas across Australia.
McClelland has experience rolling out networks, having worked for Hutchinson Telecommunications (ASX: HTA), which owns Vodafone. Incidentally, Vodafone has lost over 580,000 customers in the quarter to September 2013, and has even spawned its own hashtag, "#Vodafail," due to poor coverage in areas of most need. Telstra (ASX: TLS) has been the clear winner, growing mobile subscribers by over 1.3 million in FY 2013, as Motley Fool analyst Mike King pointed out in this excellent article.
The other element of Optus's game plan is to offer users "fairer prices" for mobile data: "We won't charge for overage like we used to," said McClelland, as reported by the Australian Financial Review.
Superinvestor Peter Lynch suggests that investors use their own experiences to better understand potential investments. My recent trip with a friend along the south coast, provided a useful comparison, because while I am with Optus, he is with Telstra. I constantly observed he had better reception, and we learned he often paid less for it.
Foolish takeaway
My experience may not be typical of the broader population, but I suspect it is. Within my own circles, Telstra has the reputation of having the best coverage, and only yesterday another friend disparaged Vodafone's inferior coverage. Customers respond more to reputation than reality, so even if Optus's new strategy does better serve customers, it will take some time for word to spread. Ten years' average customer service and more than a few shocking mobile data bills means Optus are likely to lose me.
This Fool believes that the future of telecommunications profits are in mobile data and fibre optics. Telstra may have ceded much of the fibre optic business to companies like TPG Telecom (ASX: TPM) and Vocus (ASX: VOC), but looks sure to be the dominant provider of smart phone plans for years to come. TPG and Vocus, are both up more than 100% since the start of 2013, whereas the Telstra share price increased by about 20% in that time.
