Australias Optus Revamps Pay TV Unit

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Sydney, Australia -- Australian telco Optus Communications
is putting its Optus Vision cable and telephony arm back in the competitive race with a
repackaging and repricing of its pay TV offerings. The move is part of a wider industry
consolidation and cost-cutting, said Optus Multimedia CEO Don Hagans, whose unit oversees
OV.

OV, with 170,000 pay TV subscribers, is introducing a new,
10-channel basic tier at a bargain price of $A9.95 ($US6.30) per month as part of its move
to improve customer value and to reduce churn, Hagans said.

As part of the initiative, Optus is also launching a new
marketing campaign and customer-retention program, and it is increasing installations in
apartment blocks and multiple-dwelling units.

Optus Multimedia has spent the last three-and-a-half months
"tweaking" OV, with "a real emphasis on getting back to basics,"
Hagans said.

That's included improving customer-service operations;
introducing software for new services, such as near-video-on-demand; streamlining sales
and installations; revamping its program guide; and improving the on-air look and quality
of some of the channels, he added.

The changes at OV came as cable competitor Foxtel announced
that it has reached the 300,000-subscriber mark. Foxtel CEO Tom Mockridge told his staff
that Optus' move was " a compliment" to "Foxtel and the quality of
what we can provide subscribers." He added that the "other cable operator feels
that they have to cheapen their product in order to make up lost ground." Foxtel
offers its 23-channel basic tier for $42.95 ($US27.36) per month.

In addition to its new tier structure, Optus is also
putting a bigger push behind bundling its long-distance and local phone service with pay
TV. Hagans said the bundling will become "more sophisticated," but he declined
to elaborate further. Optus' local telephony service reportedly has 40,000 customers.

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