'WIN THROUGH' COST MEASURES

Mr Anderson said the "Operation Win Through" initiative, announced in August, would help balance softening revenue.

"As we predicted earlier this year, the economic slowdown has affected our rate of growth. While Optus has continued to outperform industry growth, the global downward trend in the telecommunications sector and tightening economic conditions see revenue and EBITDA slowing.

"The second quarter of 2001/2002 has shown it will be difficult for us to achieve the full year double-digit growth in EBITDA and revenue we have consistently delivered in recent years.

"We are now anticipating growth rates in EBITDA and revenue at the high single-digit level - still double the industry average. And we will continue to take market share.

Mr Anderson said Optus would gain some benefits of "Operation Win Through" in the current financial year, but the majority will be achieved in 2002/2003.

There will also be associated costs this year, including redundancy payments. Affected staff will be offered redeployment or re-employment assistance and counselling.

Mr Anderson said Optus's first half performance would be weaker than the second due to some one-off costs and seasonality factors as previously disclosed.

"We announced at our annual results in May that there would be a slowing in our growth and in the market overall.

"After the One.Tel collapse on 26 June we said that we would suffer a significant impact to our bottom line. At that time we also indicated that markets were tightening.

"When Optus announced "Operation Win Through" on 17 August, we said we had been affected by further tightening trading. We said then that the higher levels of depreciation, amortisation and interest, the OneTel collapse and other items would result in a reduction of approximately $100 million in after tax profit in the first half.

"Now with the continuing contracting of the market, profit after tax for the full year will be significantly down on last year"s full-year result.

"As a result of the "Win Through" actions, we anticipate Optus will emerge as a stronger competitor in the Australian marketplace. We will continue to outperform the industry and take market share from the incumbent as we have in the past," Mr Anderson said.

For further information:
Stephen Woodhill
Phone: 02 9342 7850