Has Optus on Recovery Path from Cyber Security Attack
Quick Snapshot of the Performance:
- Optus is facing multiple challenges, while it was trying to recover from the losses it suffered during the COVID, it was impacted by a data hacking issue in Sep 2022.
- This incident has shrunk their brand equity, and customers have lost faith. Hence, 65K customers have churned; in particular, the Mobile business suffered at least in the short term.
- Optus have recovered from their loss of 65K in 1-2 quarters, which is not only surprising but commendable. It is worth pointing out that the price rise has assisted in cushioning the effect.
- Having said that, the data hack has impacted their brand equity and has further strained their finances and balance sheet.
- Singtel board and exec team need to make a call if they can recover the brand equity or if it is time to rebrand or sell the business or increase its, MVNO or white label, share like Amaysim.
Q3 FY23 Story from Numbers
- Impact of cyber attack contained within Q3FY23, positive net connections from Dec 2022.
- Revenue has slipped, not a surprise, with 65K subscribers lost to the competition and recovered, so to get new customers and win back a lot of incentives (like price discounts) had to be given, hence this impact (revenue numbers are not shared only % is highlighted).
- EBITDA has improved driven by growth in mobile & fixed, assisted by the price rise in Q2 and recovery in roaming.
- Cost synergies from Optus Enterprise integration.
- Amaysim is leading the AU MVNO market.
Impact of Cyber Attack
- The cyber attack's impact (Sep 22, 2023) is addressed at a war pace.
- The no of subscribers lost (65K) is not seen in the final numbers.
How the Singtel Stock is Performing
PE is above the global average and in the growth range, suggesting the stock has growth potential despite its trend downhill.
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