Ann: AGM Presentations, page-22

Low impact on Optus, according to Macquarie:

Cyberattack impact limited with low tens of thousands of subscribers lost.Telstra the main beneficiary. Limited evidence of flow thru to enterprise.

Data breach impact limited for now

Optus alerted its customers on 22 September 2022 regarding a cyberattack thatcompromised customers’ information (see link). Optus indicated churn was up~50% initially after the breach and gross new connections were down 25%compared to the typical run rate. On a net basis, the group has seen low 10,000sof outflows but this trajectory is improving on a weekly basis (as is churn). Forcontext, Optus has ~10m mobile customers and churns ~480,000 in a ‘normal’year. The group indicated the bulk of these net customer losses have transitionedto Telstra.

Limited brand impact

No disclosure was provided on whether the subscriber losses were fixed ormobile although the group indicated the bulk of subscriber losses are from theconsumer and small business side. Enterprise customers were said to beunderstanding regarding the cyberattack and there is limited evidence of brandimpact / contract renewal risk thus far.

SingTel (ST SP, S$2.55, Outperform, TP: S$3.22, Zhiwei Foo) has provisionedfor a S$142m cost associated with the data breach reflecting: i) the cost ofindependent external review with Deloitte; ii) credit monitoring services and IDreplacement for customers; and, iii) ongoing independent investigations intoOptus.

Operating trends resilient

Postpaid mobile ARPU of A$40 was up 2.6% q-o-q despite the high single digitincreases between the quarters. We remain cautious on the interpretation of priceincreases as customers typically spin down onto lower priced plans givenabundance of data inclusions.