TPG Telecom Reports 0.5% Revenue Rise and 10 Cent Interim Dividend

Mobile Growth Offsets Broadband Pressure

TPG Telecom (ASX:TPG) delivered a stable first half in 2026, with total service revenue edging up 0.5% to $2.071 billion. The solid performance was driven by a 3.1% rise in mobile service revenue to $1.224 billion, buoyed by a 64,000 increase in mobile subscribers. This growth was primarily concentrated in Digital First subscription brands and mobile virtual network operators (MVNOs), reflecting the success of TPG’s multi-brand strategy and network enhancements.

However, the home broadband segment faced headwinds, with service revenue down 1.9% to $827 million. Intense competition in the NBN market saw subscriber numbers decline, although fixed wireless access returned to growth in the second quarter, supported by standalone 5G rollout.

Margins and Costs Show Discipline Amid Inflation

Despite inflationary pressures, operating costs remained remarkably flat at $508 million, a mere 0.2% increase from the prior year. Technology expenses rose by 8.7%, reflecting investments in IT systems and network expansion, but these were offset by efficiencies elsewhere, including a reduction in marketing spend and employee benefits.

The disciplined cost control translated into a 1% increase in EBITDA to $821 million on a statutory basis, or 4.5% growth on a pro forma basis that adjusts for the impact of the 2025 Vocus asset sale and related commercial agreements. Gross margin expanded by 0.7% to $1.329 billion, with mobile margin growth outpacing revenue gains and absorbing new costs from regional network sharing and fibre access agreements.

Profit, Cash Flow, and Capital Management

Net profit after tax from continuing operations rose 9% to $35 million, benefiting from lower net financing costs following the repayment of $2.7 billion in bank borrowings in late 2025. Underlying NPATA, which excludes non-cash amortisation and one-off items, was steady at $70 million.

Operating free cash flow improved 16.4% on a pro forma basis to $199 million, reflecting lower capital expenditure and sustained earnings growth. Free cash flow to equity surged to $93 million, a $108 million increase on the prior comparable period, driven by reduced borrowing costs.

TPG Telecom’s balance sheet remains robust, with net borrowings at $1.38 billion and net debt to EBITDA ratio of 0.8 times, well below covenant limits. The company reduced its committed debt facilities by $400 million during the half, reflecting confidence in cash flow stability.

Dividend Raised as Confidence Holds

Reflecting its strong cash flow and earnings outlook, TPG declared an interim dividend of 10.0 cents per share, up 1 cent from the prior year, franked at 25%. The dividend will be paid on 29 September 2026. The board reiterated its policy to increase dividends over time in line with sustainable profit and cash flow growth.

Guidance and Strategic Focus

TPG Telecom maintained its full-year guidance unchanged, targeting EBITDA between $1.665 billion and $1.735 billion and capital expenditure of approximately $750 million. This outlook assumes no material changes in operating conditions.

The company continues to execute on its strategy of leveraging network sharing, digital-first brands, and cost discipline to drive growth. After the 2025 sale of its fibre network and fixed business to Vocus Group, TPG has focused on mobile expansion and operational efficiency to underpin returns.