So far so good for our second-biggest telco, Optus Optus is going through a fascinating set of transitions. AUSTRALIA'S second biggest telco Optus is going through a fascinating and complex set of transitions itself. The numbers suggest, so-far so-good. Optus is essentially a mobile telephony company. Some 62 per cent of its revenue comes from mobiles; and an even bigger 66 per cent share of operating profit. This size and even more so the critical mass of mobiles, is important on two levels. Internally the mobiles business drives the company. Externally it's the only area where Optus - or indeed any telco - can compete on even half-way head-to-head terms with the elephant in the telco room, Telstra. Impressively, Optus actually managed to increase its mobiles operating profit - true by a marginal 1.6 per cent - in the March quarter, despite a (mostly, managed) 7.3 per cent fall in the divisional operating revenue. As a consequence, the gross mobiles profit margin leapt from 31 to 34 cents in the revenue dollar. This was gained while managing a shift in the customer base back from pre-paids to post-paids - in the broader context of a relative shift from voice to data, and the expansions of its (data-focussed) 3G and 4G networks. Post-paids generate a much higher dollar income (ARPU) per customer than pre-paids. In the quarter, $54 per month as against $22. The $54 was a quite significant fall against the $62 figure of a year ago. Hence the revenue drop. But it waa actually done (mostly) deliberately by Optus, and Optus actually gained from it. Importantly also, so did the customer - a clear business building win-win. It flowed from four specific factors. Lower mobile termination rates and service credits associated with device repayment; and lower roaming and (contract) breakage revenues. More broadly, SMS and data revenue went from 49 to 53 per cent of ARPU, with a significant lift in premium (and profit richer) content - producing self-reinforcing margin growth.