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UPDATE 1-Australia's Vocus cuts 2018 guidance as competition weighs

Published 20/02/2018, 09:47 am
Updated 20/02/2018, 09:50 am
© Reuters.  UPDATE 1-Australia's Vocus cuts 2018 guidance as competition weighs

(Adds background on competition, energy business performance)

Feb 20 (Reuters) - Australian telecom operator Vocus Group Ltd VOC.AX trimmed its full-year guidance and flagged a 25 percent slide in interim profit as customers migrating to a new government-owned broadband network dented revenue from conventional fixed-line voice connections.

The company slashed its underlying profit guidance for fiscal 2018 to A$125 million to A$135 million from its previous estimate of A$140 million to A$150 million. Vocus did not declare an interim dividend.

Underlying profit totalled A$68.6 million ($54.27 million) for the six months to Dec. 31, the company said on Tuesday, missing analysts' estimate of A$69.5 million, according to Thomson Reuters I/B/E/S.

Vocus' weak voice revenue suggests that despite its hold on broadband customers, people are no longer paying for fixed-line phones - eating away at one of their highest margin earners in the face of competitive pressure from the government's new National Broadband Network.

Vocus, like larger rivals Telstra Corp Ltd TLS.AX and TPG Telecom TPM.AX , has found reselling internet access to a new government-owned fibre optic network less profitable than initially expected.

The telco also said that the number of subscribers to its energy business fell short of estimates, further denting the bottom line.

In August, Vocus missed its own earnings guidance, slashed its dividend and said it was mulling asset sales to service its debtload. ($1 = 1.2641 Australian dollars)

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