TPG reports slight decreases for 2021 first half as tower sale explored

In statutory terms, TPG Telecom was able to report a bumper set of numbers, however this was only due to its 2020 merger with Vodafone accounting for four days.

Using a set of pro forma simulated numbers, TPG was slightly down on its headline numbers. Revenue dropped 3% to AU$2.6 billion, earnings before interest, tax, depreciation, and amortisation (EBITDA) dropped by the same percentage to AU$886 million, and net profit fell 6% to AU$132 million.

Looking at its consumer and corporate segments, consumer service revenue fell AU$119 million to AU$1.76 billion, while handset revenue increased AU$39 million to AU$387 million, giving consumer EBITDA of AU$638 million, a drop of AU$28 million. It was a similar trend in the corporate segment, with service revenue down AU$32 million to AU$438 million and handset revenue more than doubled from AU$19 million to AU$48 million, resulting in a AU$10 million drop in EBITDA to AU$236 million.

For subscribers, TPG saw a decline of 28,000 in postpaid subscriptions to 3.19 million, prepaid experienced the same drop in customers to 1.9 million, and a drop of 8,000 wholesale customers to 15,000. Overall the company has 5.1 million mobile subscribers.

In its fixed network, TPG now has 1.95 million customers on the NBN, 154,000 on-net cable and fibre-to-the-basement (FttB) customers, and saw a 42,000 reduction in ADSL customers leaving 73,000 remaining on the technology. Overall, its fixed network total increased by 23,000 to 2.195 million.

Average revenue per user continued to drop across postpaid mobile, NBN, and on-net customers, while prepaid mobile saw a $2 increase compared to this time last year to AU$18.90.

TPG said it was conducting a strategic review of its tower assets, and of its total network of 5,800 rooftops and towers for its mobile network, the company owns passive infrastructure for 1,200 of those sites, as well as over 400 small cells. The company said it was seeking a preliminary assessment and had not made a decision on how to proceed.

"The group's EBITDA result is pleasing and demonstrates a solid underlying performance achieved through the realisation of AU$38 million in merger cost synergies and strong commercial management," CEO Iñaki Berroeta said.

"In an environment with continued headwinds from COVID-19, NBN margin erosion and the new RBS levy, and residual challenges from the merger delay and 5G vendor restrictions, we are performing well.

"We are seeing rapid early growth in NBN alternatives with our 4G home wireless customer base more than tripling in the first six months of the year, and we will build on this following the launch of our 5G home wireless in June."

On Thursday, TPG announced it had signed up Uniti to be a wholesaler on its FttB network that covers 240,000 premises in apartment buildings and offers speeds up to 100Mbps.

"Our FttB network is a high-speed, simple, lower-cost NBN alternative and our new wholesale pricing offers a CVC-free alternative," TPG wholesale group executive Dan Lloyd said.

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