TPG Telecom Grows EBITDA 3.4%, Doubles Mobile Coverage, Proposes $5.25B Asset Sale

Strong Financial Performance Amid Strategic Transformation

TPG Telecom has delivered a solid financial performance for the 2024 fiscal year, with total service revenue rising 1.5% to $4.7 billion and EBITDA increasing 3.4% to $1.988 billion, comfortably meeting market expectations. The company’s mobile segment was a standout, growing service revenue by 5.4% to $2.27 billion, driven by a 1.8% increase in subscribers and strong uptake of prepaid digital brands. Despite challenges in the fixed segment, TPG maintained gross margins through a focus on profitability and fixed wireless growth.

Network Expansion Reshapes Competitive Landscape

A key highlight was the activation of a regional network sharing agreement with Optus, which effectively doubled TPG’s mobile network coverage from around 400,000 to over one million square kilometres, reaching 98.4% of the Australian population. This expansion has allowed Vodafone and other TPG brands to penetrate regional markets previously inaccessible, sparking a surge in customer acquisitions and data traffic. Early indicators show a 40% year-on-year increase in customers switching to Vodafone, with postpaid connections rising significantly in both metropolitan and regional areas.

Strategic Fibre Asset Sale to Simplify and Strengthen

TPG announced the proposed sale of its fibre network infrastructure and Enterprise, Government, and Wholesale fixed business to Vocus Group for an enterprise value of up to $5.25 billion. This transaction, which has cleared the ACCC and awaits further regulatory approvals, is designed to streamline TPG’s operations, reduce capital expenditure, and secure long-term access to fibre infrastructure at predictable costs. The deal is expected to reduce annual operating costs by $210 million and capex by $150 million, while replacing these with a $130 million per year access agreement, enabling TPG to focus investment on mobile network growth and customer-facing technology.

Refreshed Strategy Focuses on Agility and Customer Experience

With these milestones behind it, TPG has outlined a refreshed strategy centred on four pillars: running networks smarter, invigorating brands and services, simplifying customer offerings, and becoming faster, simpler, and stronger. This includes a significant reduction in product plans from over 3,700 to around 1,000, with a longer-term target of about 100, alongside IT modernization efforts to enhance digital capabilities and customer experience. The company also unveiled a brand refresh for TPG, signalling a renewed commitment to delivering value and reliability.

Outlook and Governance Updates

Looking ahead, TPG expects 2025 EBITDA to range between $1.95 billion and $2.025 billion, with capital expenditure forecast around $900 million, reflecting a decline as network investment peaks pass. The company anticipates improved operating free cash flow due to lower capex and better working capital management. The AGM saw strong shareholder support for board re-elections and executive remuneration plans, including the election of new independent director Paula Dwyer, reinforcing governance stability as TPG navigates this transformative phase.