TPG announces mobile sites in Sydney and Melbourne

TPG has provided an update on its mobile network build-outs in Australia and Singapore, with the telecommunications carrier having installed sites in Sydney and Melbourne.

"The mobile network builds in Australia and Singapore continue to progress well," TPG said during its first-half FY18 financial results.

"Capital expenditure outlook on both projects remains in line with initial forecasts. Deployment in Australia is well under way. Sites already installed in Sydney and Melbourne."

TPG added that it will be implementing a new small cell deployment program, which will help it deliver 5G services in future.

"Refined small cell deployment model to accelerate delivery of high volume of small cell sites in coming months. Small cell site access agreements now substantially complete," TPG said.

"High density of small cell sites and deployment of Cloud RAN will provide a platform for 5G services."

TPG's AU$1.9 billion Australian mobile network is expected to be complete across Sydney, Melbourne, and Canberra by mid-2018, with TPG in September announcing signing contracts with technology partners on mobile sites, small cells, and macro cells.

The telco also remains on track to achieve nationwide mobile outdoor service coverage in Singapore by the end of this year, having last year signed vendors to assist in building out the network.

During the six months to December 31, TPG spent AU$791.8 million on capital expenditure, including AU$4.1 million on its Australian mobile network, AU$29.7 million on its Singapore mobile network, and AU$594.8 million on 700MHz spectrum.

Its fibre-expansion contract with Vodafone Australia also "neared completion" during the six-month period, after it last year spent AU$100 million on an "acceleration" of the AU$900 million deal with Vodafone to build out a 4,000-kilometre fibre network, which is expected to be completed during FY18, as well as on the acquisition of additional international capacity.

TPG's current mobile customers -- with the telco now wholesaling Vodafone's 4G network -- stood at 143,000 MVNO subs on iiNet and 278,000 on TPG as of December 31.

For the first half of FY18, TPG reported earnings before interest, tax, depreciation, and amortisation (EBITDA) of AU$418.2 million, down by 12 percent year on year, and net profit of AU$198.7 million, down by 11 percent.

Underlying net profit was AU$217.7 million, up 5 percent, while revenue rose by 1 percent from AU$1.24 billion to AU$1.25 billion.

Much of the losses were attributed to the Australian government's National Broadband Network (NBN), which it said has caused "broadband gross margin erosion and loss of home phone voice revenue".

TPG's consumer business group made AU$878 million in revenue during the period, up from AU$861 million a year earlier: AU$706.5 million from broadband, AU$63.5 million from fixed voice, and AU$57.2 million from mobile.

Its corporate business benefited from growth in its fibre-to-the-building (FttB) services, with 45,000 customers now on FttB connections after 8,000 were added in the half. Corporate revenue grew marginally year on year, from AU$373.8 million to AU$374 million. Of this, AU$274.1 million came from data and internet, AU$68 million from voice, and AU$31.9 million from legacy iiNet.

During the period, TPG was also contracted to roll out the City of Adelaide's 10-gigabit fibre broadband network across the city beginning in "early 2018".

In total, TPG now has 1.93 million broadband subscribers: 966,000 on iiNet and 962,000 on TPG. TPG's broadband subscribers are made up of 45,000 on FttB, 23,000 on off-net ADSL, 94,000 on on-net ADSL, 459,000 on on-net ADSL bundle; and 341,000 on NBN; while iiNet's broadband subscribers are spread out across 379,000 on NBN, 392,000 on on-net ADSL, 115,000 on off-net ADSL, and 80,000 on "other".

It added 79,000 NBN customers during the half in its TPG brand and 80,000 in iiNet; however, in December, the telco was forced to refund around 8,000 NBN customers after not providing them with the speeds they were paying for.

According to the Australian Competition and Consumer Commission (ACCC), TPG "misled" customers about the maximum speeds their lines were capable of between September 1, 2015, and June 30, 2017.

"TPG advertised its high-speed plan as 'Seriously Fast Internet. Up to 100Mbps'," the ACCC said.

"TPG has admitted that by promoting and offering speed plans with maximum speeds that could not be delivered, it likely contravened the Australian Consumer Law (ACL) by engaging in misleading or deceptive conduct and making false or misleading representations."

ACCC Chair Rod Sims said fibre-to-the-node (FttN) and FttB technical limitations meant "many" of its 100/40Mbps customers could not reach those speeds, or even half those speeds.

In responding to the ACCC's NBN speed-advertising guidelines, it was also revealed in December that TPG's 100Mbps plan only hits around 50Mbps during peak evening times.

By comparison, Optus and Telstra have said their 100 plan hits 60Mbps during the evening, while Aussie Broadband said its speeds are between 60 and 100Mbps.

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