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A Journey To Australia For A Peek At Singapore Telecommunications Limited’s Optus

I had recently made a trip down to Australia. It was mainly for leisure, but I could not help but visit some of the major businesses in Australia that are actually owned by listed-companies in Singapore. There are quite a number of such companies.

For example, Frasers Centrepoint Ltd (SGX: TQ5) is now one of the largest property owners and developers in Australia after it acquired the Australia-based Australand Property Group back in 2014.

One of Singapore’s largest listed companies – and the nation’s largest telecommunications operator – Singapore Telecommunications Limited (SGX: Z74), is another good instance. The company owns Optus, currently Australia’s second largest telecommunications company. Because of Optus, Australia is actually SingTel’s second largest geographical market after Singapore.

After landing at Melbourne International Airport, my first stop was an Optus store to gain a first-hand look at the level of service and pricing that Optus has compared to its competitors.

optus_australia
Source: Stanley Lim; Optus’ Melbourne Burke Street Store

The store I visited was in the city of Melbourne along Burke Street. I thought the layout of the store is quite similar to an Apple Inc store with well-placed displays of mobile devices and information on mobile plans.

Interestingly, there is no line to queue at. One member of the staff would act as a concierge, moving around the store asking customers how he can help. It is an interesting concept but I personally found it quite confusing. That’s especially so on the particular day I visited when there were more than 15 customers in the small store.

I had to constantly try and grab the attention of the concierge and I did not have a proper place to wait while he is attending to someone else. Moreover, when I approached other staff for help, they told me to continue waiting for the concierge-staff even when they did not seem to be busy with anything in particular. After waiting for 20 minutes, I gave up and walked next door to a Vodafone store (Vodafone’s one of Optus’s competitors in the Australia market) and got my prepaid phone card within two minutes.

Although my experience on that day with Singtel Optus was not great, I am sure I should not judge the company by a single experience in a single store. In fact, during my visit, I had made anecdotal observations that tourists had tended to look for prepaid SIM cards from Optus more than from other providers; perhaps Optus being part of bona-fide international company (SingTel has a strong international presence through its many other Asia-based associates) has helped to increase its mind-share among tourists in Australia.

The mobile plans Optus is offering is quite similar to other service providers. When I signed up for my prepaid plan with Vodafone, the company gave me an additional discount from their official stated price plans. I am assuming that telecommunication companies in Australia are in a price war and are pricing their plans at rates lower than what’s advertised. In a price war, only the consumers win.

I also interviewed some of my friends from Australia for their views on how Optus is doing. Here are some of their comments:

“Vodafone made some missteps a few years ago and lost subscribers to both Telstra [Telstra is Australia’s largest telecommunications company at the moment] and Optus. Generally, Telstra and Optus still offer better coverage compared to Vodafone, especially in the outskirts.” – Optus retail subscriber

“I use both Telstra and Optus. They offer similar service levels and prices. I have no preference and would change to whichever can offer me a better deal.” – Small business owner

Again, all the above are just anecdotal observations I have made in my brief visit to Australia recently. I am sure it does not reflect the whole story of Singtel’s Optus or its growth potential. But, it is still interesting for me to gain a first-hand look at how the company is perceived by its customers instead of just reading about it from Singtel’s annual report.

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The information provided is for general information purposes only and is not intended to be personalised investment or financial advice. Motley Fool Singapore contributor Stanley Lim owns shares in Frasers Centrepoint.