TPG reports 15 percent jump in profit amid NBN battle

TPG has reported a jump in yearly profit by 15 percent as the company plans to offer services on its fibre to the basement product this month in direct competition with the NBN.

Australian telecommunications giant TPG has reported a 15 percent jump in net profit after tax of AU$171.7 million on the back of its AAPT acquisition, and plans to embark on a network to rival the National Broadband Network (NBN) in CBD locations.

The net profit after tax was up for the last financial year ending June 30 from AU$149.2 million in the previous 12 months, on the back of a 34 percent increase in revenue to AU$970.9 million for the year.

The vast majority of the company's revenue came from its consumer broadband business, which saw revenues of AU$478.4 million for the year, with AU$563.2 million revenue including its mobile and other consumer products.

TPG added 77,000 customers in the financial year, with 120,000 customers either joining on a bundled plan, or shifting from a standalone broadband product onto a bundle. The company has 362,000 mobile subscribers, which TPG said was flat due to wholesale pricing from Optus. Average revenue per user sits at AU$50.12 at the end of the financial year.

TPG's corporate business also saw an increase in revenue up to AU$159.1 million including the revenues from AAPT.

Since the takeover of AAPT, TPG told shareholders that management and staff had been integrated into the TPG business, with accounting systems already consolidated, but network and business systems were still in the process of rationalisation.

TPG announced that this month has seen the first sale of the company's fibre-to-the-basement plans for AU$59.99 per month for between 50Mbps and 100Mbps download speeds and unlimited data. The company confirmed that the first few customers were connected in the past few weeks.

TPG's decision to rollout fibre to the basement to 500,000 apartments across Sydney, Melbourne, Perth, Brisbane and Adelaide, has not been opposed by the Australian Competition and Consumer Commission , and puts the network in direct competition with the federal government's NBN rollout.

NBN Co is still considering a "commercial response" that will see the company speed up its delivery of the network to those locations to beat TPG to the punch. The government is also considering regulatory responses to potentially force TPG to make its network open to other ISPs to offer services in those locations.

While TPG is competing with NBN Co on the infrastructure level, it is also offering services on the NBN, with a 'soft launch' of its NBN plans starting in the last quarter of the last financial year. TPG said it has been adding between 500 and 600 NBN customers each week since the launch.