Highlights

  • TPG Telecom reported FY25 EBITDA of $1,660 million, up 18.4%, with Mobile Service Revenue rising 4.2% to $2,423 million, supported by 228,000 net new mobile subscribers.
  • The company returned $3 billion to shareholders through a capital management plan, repaid $2.7 billion in bank borrowings, and increased minority shareholder ownership during the year.
  • FY26 EBITDA guidance of $1,665 million to $1,735 million was issued, with capex expected at approximately $750 million, reflecting the company's shift to a leaner, mobile-led business model.

 

TPG Telecom Limited (ASX:TPG) is Australia's second-largest telecommunications company, formed through the 2020 merger of TPG Corporation and Vodafone Hutchison Australia. The company operates across mobile, fixed broadband, and enterprise telecommunications services, with brands including TPG, Vodafone, iiNet, Internode, and Felix. Following the completion of the sale of its fibre infrastructure assets and Enterprise, Government and Wholesale (EGW) Fixed operations during 2025 — collectively referred to as the Vocus Transaction — TPG Telecom has repositioned itself as a simpler, mobile-led business with a materially reduced debt position and a sharper focus on consumer and business mobile services and fixed broadband. The FY25 full-year results, released on 27 February 2026, captured the financial outcomes of what CEO Iñaki Berroeta described as a transformational year.

Financial Performance: EBITDA Growth Driven by Mobile and Cost Control

TPG Telecom's FY25 Service Revenue grew 2.2% to $4,179 million, a modest absolute increase driven by divergent performance across Mobile and Fixed. Mobile Service Revenue increased 4.2% to $2,423 million, while Fixed Service Revenue grew 0.7% to $1,702 million. EBITDA reached $1,660 million, an increase of 18.4% over FY24's $1,402 million. On a Pro Forma guidance basis — which assumes new commercial arrangements arising from the Vocus Transaction were in place for the entire period and excludes material one-offs — EBITDA was $1,637 million, an increase of 2.0% and just above the midpoint of the guidance range that had been issued to the market.

Net profit after tax was $52 million, compared with a loss of $140 million in FY24. The FY25 NPAT reflects EBITDA growth, flat depreciation and amortisation, lower bank borrowing costs following the substantial debt repayment, and a $45 million non-recurring income tax benefit, partially offset by the initial impact of implementing a new handset receivables financing program in October 2025. Underlying NPATA — which excludes customer base amortisation and material one-offs — was $130 million, up 16.1% from $112 million in FY24, providing a clearer view of the underlying earnings improvement.

Mobile Segment: The Growth Engine

The mobile business was the standout driver of FY25 financial performance. TPG Telecom added 228,000 net new mobile subscribers during the year, its strongest period of mobile subscriber growth since 2022 when international borders reopened post-COVID. Growth was particularly evident in digital-first subscription brands and across major metropolitan and regional centres following the launch of the company's regional mobile network sharing agreement with a national network partner in January 2025. Average Revenue per User (ARPU) rose to $35.51, an increase of 49 cents over FY24, demonstrating that subscriber growth was not achieved at the cost of pricing dilution.

The regional network expansion allowed TPG Telecom to access geographic coverage that its own network could not economically deliver, broadening the addressable subscriber market and addressing a competitive gap that had historically disadvantaged the company versus the two dominant network operators. The company absorbed the initial costs of this expansion within the period and continues to characterise it as a growth investment that will drive higher revenue and improved earnings over coming years as network utilisation and subscriber penetration in regional markets mature.

Fixed Business and NBN Market Dynamics

Fixed Service Revenue grew modestly to $1,702 million, supported by continued customer growth in TPG's Fixed Wireless broadband service and a return to growth in Vision Network subscribers. However, management acknowledged ongoing industry-wide challenges in the NBN market, which continues to be adversely affected by high wholesale prices relative to international benchmarks and intense competition from volume-focused resellers and non-telco providers offering NBN services at very thin margins. These structural dynamics in the fixed broadband market have been a persistent headwind for the entire industry and are not unique to TPG Telecom.

Capital Management: $3 Billion Returned to Shareholders

In August 2025, TPG Telecom announced a transformational capital management plan comprising a pro rata capital return of $3 billion, consisting of $1.52 per share Capital Reduction and a 9.0 cents per share unfranked special dividend. The plan was funded by net proceeds from the handset receivables financing program and was combined with a reinvestment plan enabling an increase in minority shareholder ownership. The company also repaid $2.7 billion in bank borrowings during FY25, dramatically reducing its leverage and interest costs. This deleveraging directly benefited FY25 NPAT through lower finance costs and positions the business for improved free cash flow generation going forward.

Operating Free Cash Flow for FY25 was $1,291 million, an increase of $642 million over FY24, primarily reflecting $687 million of benefit from the initiation of the handset receivables financing program and a $118 million reduction in recurring capital expenditure. Lower ongoing capital expenditure is expected to persist as TPG Telecom has passed the peak of its investment cycle for network and IT system improvements, providing a structural tailwind to cash flow in FY26 and beyond.

Dividends and Capital Return Framework

The TPG Telecom board declared a final dividend of 9.0 cents per share for FY25, franked at 30%, taking total FY25 ordinary dividends declared to 18.0 cents per share. Including the $3 billion capital return and the special dividend paid in November 2025, total distributions to shareholders in FY25 were substantial. The company announced a new dividend policy targeting no change to ordinary dividends in FY25 with an intention to increase dividends over time in line with sustainable growth in profit and cash flow, a framework that ties future increases to earnings expansion rather than committing to a fixed payout uplift schedule.

FY26 Guidance and Strategic Direction

For FY26, TPG Telecom issued EBITDA guidance of $1,665 million to $1,735 million, with capital expenditure on an additions basis of approximately $750 million. The midpoint of the EBITDA range of $1,700 million would represent growth of approximately 3.9% over the FY25 Pro Forma guidance basis EBITDA of $1,637 million. EBITDA growth in FY26 is expected to be driven by continued expansion in the Mobile business and disciplined operating cost management. The company has framed its strategic priorities around growing mobile market share, expanding EBITDA margins, and delivering growth in free cash flow, earnings per share, and return on capital.

Conclusion

TPG Telecom's FY25 results mark a genuinely transformational year for the business. The company grew mobile subscribers at the fastest pace since 2022, expanded EBITDA by 18.4%, returned $3 billion to shareholders, repaid $2.7 billion in debt, and issued FY26 guidance pointing to continued mobile-led earnings growth. The shift to a simpler, mobile-led model following the Vocus Transaction has materially reduced complexity and improved the cash flow outlook. For investors and analysts tracking Australia's telecommunications sector, TPG Telecom's FY26 trajectory — balancing mobile subscriber and ARPU growth with cost discipline and reduced capital expenditure — will be the key narrative to follow over the coming 12 months.