How TPG Telecom (ASX:TPG) Is Balancing Mobile Growth Against a Shrinking Home Broadband Base

Sonal Goyal

11 November 2026 06:45 PM AEDT

How TPG Telecom (ASX:TPG) Is Balancing Mobile Growth Against a Shrinking Home Broadband Base

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Key Highlights

Service Revenue was A$2,071 million for the six months to 30 June 2026, up 0.5%.
EBITDA rose to A$821 million, up 1% on a reported basis.
Mobile growth, cost control and lower interest costs supported the result.
Home broadband continues to lose customers, and the company reaffirmed its full-year Earnings guidance.

How is TPG Telecom (ASX:TPG) growing earnings when one of its largest businesses, home broadband, is losing customers? Its first-half 2026 result, released on 21 August 2026, answers with a combination of mobile growth, cost control and lower interest costs. The company reaffirmed its full-year earnings guidance and lifted the interim dividend, but the broadband decline and heavy competition show why the result is more nuanced than the headline profit growth suggests.

TPG reports on a calendar year, so the half-year referred to here is the six months to 30 June 2026, and FY26 guidance refers to the year to 31 December 2026.

The first-half result

For the six months to 30 June 2026, TPG reported service revenue of A$2,071 million, up 0.5%. Net profit after tax was A$35 million. Underlying Profit (NPATA) was A$70 million.

The Interim Dividend was 10 cents per share, 25% franked, an increase on the prior period.

Mobile versus broadband

Mobile is the growth engine. Mobile service revenue rose 3.1% to about A$1.2 billion. Subscribers rose by 64,000 to 5.81 million, and average revenue per user (ARPU) rose 0.7% to A$35.21.

Home broadband is the problem area. Subscribers fell from 1.98 million at the end of FY25 to 1.94 million, and service revenue fell 1.9%, which the company attributed to fierce competition. Fixed wireless returned to growth in the second quarter of 2026, and the company says the NBN subscriber base continues to stabilise. In practice, TPG is competing with Telstra, Optus, Aussie Broadband and many smaller resellers on NBN plans where margins are thin.

What drove profit

Management said costs were held largely flat through simplification despite inflation, which supported EBITDA. Lower borrowing costs after Debt reduction in FY25 lifted net profit. Both are real but different in nature: cost savings can be repeated only so far, and the interest cost benefit depends on the debt level and Interest Rate environment.

Guidance and outlook

FY26 EBITDA guidance of A$1,665 million to A$1,735 million was reaffirmed, with Capital Expenditure of around A$750 million. Management expects EBITDA to grow faster than service revenue over the longer term and expects ARPU growth in the second half and sustained ARPU and subscriber growth in coming years. Dividends are expected to grow over time in line with profit and cash flow. Those are company expectations, not forecasts of results.

Sector context

Australia's mobile market is concentrated among Telstra, Optus and TPG, and the industry has recently been characterised by price increases and focus on ARPU. Competition for NBN customers has been intense. The market also involves regulatory decisions on spectrum, mobile infrastructure sharing and competition policy.

Risks to monitor

Home broadband erosion. Subscribers and revenue are falling in a price-competitive segment.

Competition in mobile. Pricing discipline in the market can change, and larger rivals have greater scale.

Cost savings delivery. The opex savings target relies on execution.

Interest rates. Further earnings improvement from lower borrowing costs depends on debt levels and rates.

Capital intensity. Capex of about A$750 million is a large claim on cash.

Franking. The interim dividend was 25% franked, which affects after-tax returns for some investors.

Customer experience. Churn is a continual risk when pricing rises.

How to read the earnings quality

The first-half numbers contain three different kinds of improvement. Mobile growth is commercial and repeatable if subscribers and ARPU keep rising. Cost simplification is partly within management's control but finite. Lower interest costs follow from Balance Sheet repair and may not recur at the same pace. Distinguishing them helps explain why the company can report higher earnings and Cash Flow while broadband volumes shrink, and why management's guidance leans on all three.

What to watch

The company's disclosures cover the second-half outturn against the guided EBITDA range, the full-year result and FY27 guidance expected early in 2027, mobile subscriber and ARPU trends, fixed wireless growth, and any update on the cost savings programme.

FAQs

Q: How did TPG Telecom (ASX:TPG) perform in the first half of 2026?

A: Service revenue rose 0.5% to A$2,071 million and EBITDA rose to A$821 million.

Q: Why is the result more nuanced than the headline?

A: Home broadband is losing customers and competition is heavy, even as mobile growth and cost control support earnings.

Q: What period does the guidance cover?

A: TPG reports on a calendar year, so FY26 guidance refers to the year to 31 December 2026.

Q: What dividend was declared?

A: The interim dividend was lifted.

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