CABLE & WIRELESS OPTUS DEMONSTRATES SUCCESS OF BUNDLING STRATEGY

Cable & Wireless Optus announced today that its bundling strategy has proved a great success with 60 per cent of new pay TV customers taking local telephony as well.

Cable & Wireless Optus now has 310,000 local call customers, of whom 100,000 are directly connected to the Optus HFC network. This is up by about 110,000 from 31 December 1998.

The bundling strategy is an example of the way Cable & Wireless Optus is able to take advantage of its HFC network to become a leader in integrated communications.

A new bundled package of products, called Optus Choices, will allow customers to make savings on installation and monthly access charges by packaging local and long distance telephony with Pay TV and Internet services.

Chris Anderson, Chief Executive of Cable & Wireless Optus said, "Cable & Wireless Optus' future lies in its ability to offer customers discounts on bundled services right across our product range. This is a significant competitive advantage as no other single carrier is able to offer the range of bundled products which is currently available to Cable & Wireless Optus' customers."

"Customers prefer to deal with one company for all their communication needs. Bundling these products takes us one step closer to delivering a complete communications solution," Mr Anderson added.

"The HFC network, which passes 2.2 million homes, gives Cable & Wireless Optus a tremendous marketing and competitive advantage. The strategy behind the investment in the network is clearly being vindicated," said Mr Anderson.

The strong growth in local telephony is supported by the tendency of Cable & Wireless Optus customers to take more than one product at a time.

"Some 98 per cent of directly connected local telephony customers also take Optus Long Distance services," said Paul Donovan, Chief Commercial Officer.

"Dual sales of Pay TV and telephony, as a proportion of total Pay TV sales has increased from around 10 per cent for the period July-October 1998 to more than 60 per cent today. Likewise, dual sales of Pay TV and telephony as a proportion of local telephony sales have increased from less than 20 per cent in October 1998 to around 30 per cent in March 1999." Mr Donovan commented.

"In addition, churn rates for long distance telephony and Pay TV are substantially reduced where customers take more than one product.

"What is more, offering telephony customers reduced rates on Internet and Pay TV services not only aids customer retention, but also significantly increases the average amount each household spends with Cable & Wireless Optus," Mr Donovan said.

The Optus Choices bundled offer has been initially launched in Melbourne and will be shortly extended to Sydney and Brisbane to homes passed by the HFC network.

For more information:
Rena Richmond-Grass
Cable & Wireless Optus
Phone: 02 9342 8138
Mobile: 0412 361 426
Email: rena.richmond-grass@yes.optus.com.au