Aussie Broadband Completes AGL Telco Acquisition, Eyes Third Largest NBN Provider Spot
Aussie Broadband has finalized its takeover of AGL Telco, adding 350,000 connections and setting the stage for significant earnings growth. The company is also progressing key customer migrations and upgrading its growth ambitions toward 1.3 million NBN connections.
- AGL Telco acquisition completed with $115 million share issuance
- Migration of 350,000 AGL connections to finish by Q2 FY27
- More and Tangerine Telecom migrations on track, adding 275,000 connections
- Underlying EBITDA contributions expected: $21 million (AGL), $12 million (More/Tangerine)
- Aussie Broadband surpasses 1 million connections, targeting 1.3 million post-migrations
AGL Telco Acquisition Finalized with Strategic Partnership
Aussie Broadband (ASX:ABB) has closed the acquisition of AGL Energy’s telecommunications arm, AGL Telco, marking a substantial leap in scale. The deal, sealed in mid-June 2026, included issuing $115 million worth of shares to AGL, equating to roughly 7% of Aussie Broadband’s capital. This move not only expands Aussie Broadband’s customer base by 350,000 NBN and mobile connections but also cements a long-term partnership with AGL, exposing the company to a potential telecommunications market of 4.5 million AGL customers.
The migration of these connections is slated to complete in the second quarter of FY27, with AGL Telco expected to contribute $21 million in underlying EBITDA in its first year post-migration. The partnership also opens avenues for growth through AGL’s energy customer channels and bundled offerings, alongside anticipated margin improvements from increased scale and operational efficiencies.
Progress on More and Tangerine Telecom Migrations
Alongside the AGL deal, Aussie Broadband is on track to finalize the migration of More Telecom and Tangerine Telecom customers by the end of June 2026. This migration encompasses around 275,000 active services, about 95% of prior estimates, and is expected to generate $12 million in annualized underlying EBITDA from FY27. The company also completed the sale of the Buddy Telco brand to Tangerine but will continue to host Buddy connections on its network under the existing Wholesale Services Agreement.
Additional Transactions and Strategic Positioning
Further reshaping its portfolio, Aussie Broadband confirmed the acquisition of Nexgen Investment Group and the divestment of Digital Sense Hosting, transactions announced earlier in February 2026. These moves align with the company’s upgraded Look-to-28 strategy, aiming to enhance earnings quality and diversify revenue streams with a more capital-light model. The strategy targets sustainable medium-term growth supported by strong cash flow and operational leverage from increased scale.
Trading Performance and Market Position
Despite the complexity of multiple transactions and large-scale migrations, Aussie Broadband reported organic growth of approximately 28,000 connections in the five months to May 2026, totaling around 67,000 for the financial year to that date. The company surpassed the 1 million broadband connection milestone in mid-May and is on course to become Australia’s third largest NBN provider with more than 1.3 million connections following the completion of the More and AGL migrations.
Financially, Aussie Broadband maintains a robust balance sheet with a net debt to EBITDA ratio of 0.72x as of May 2026, providing flexibility for future capital management and growth investments. The company expects FY26 underlying EBITDA to fall in the middle of its $162 million to $167 million guidance range, with capital expenditure anticipated at the upper end of $55 million to $60 million.
CEO Highlights Operational Leverage and Competitive Position
Group CEO Brian Maher praised the team’s execution, highlighting the rarity of completing four significant transactions within six months while maintaining organic growth momentum. He emphasized that the acquisitions and migrations are central to achieving the Look-to-28 ambitions, positioning Aussie Broadband for higher-quality, sustainable earnings. Maher also pointed to the company’s focus on Australian-based customer service, competitive pricing for FY27, and network performance as key factors in continuing to attract customers migrating from legacy and lower-speed services.
Looking ahead, operational leverage from the expanded scale is expected to enhance capital efficiency and support stronger returns, though competition remains intense.
Bottom Line?
Aussie Broadband’s completed acquisitions and ongoing migrations position it for significant scale and earnings growth, but execution of the large-scale customer transitions will be critical to realizing these ambitions.
Questions in the middle?
- Will the large-scale migrations of AGL and More connections proceed without service disruptions or customer churn?
- How will Aussie Broadband leverage its strategic partnership with AGL’s energy customer base to drive telecom growth?
- What impact will the company’s capital-light model have on future investment flexibility amid competitive pressures?
