Key Highlights

  • Total Revenue was $2,425 million, down 0.9% pro forma, while service revenue rose 0.5% to $2,071 million.
  • 2026 EBITDA guidance of $1,665 million to $1,735 million was unchanged, against $1,637 million pro forma in 2025.
  • Debt to EBITDA was 0.8 times, down from 1.5 times.
  • Vodafone’s net promoter score rose 12 points to 31 since June 2025.

What does TPG Telecom's (ASX:TPG) latest result say about a telco whose mobile Business is growing while its home broadband arm shrinks? The company's first-half report, released on 21 August 2026, shows Earnings rising on stable revenue, lower Debt and unchanged full-year guidance. It covers the six months to 30 June 2026 (1H26). Most comparisons are on a pro forma basis, which restates the first half of 2025 (1H25) as if the Vocus transaction arrangements applied throughout. Figures are Australian dollars. The copy of the announcement we reviewed was marked as draft and under review, so numbers should be checked against the final filing.

The reported numbers

Total revenue was $2,425 million, down 0.9% from $2,448 million pro forma. Service revenue, which excludes handset and hardware sales, rose 0.5% to $2,071 million. Handset and hardware revenue fell 8.8% to $354 million on lower volumes.

EBITDA, a measure of earnings before interest, tax, Depreciation and amortisation, was $821 million, up 4.7% from $784 million. Operating expenses were $508 million, flat against high inflation.

Statutory net profit after tax was $35 million, compared with $32 million for the group in 1H25. Underlying Profit after tax before Amortisation (NPATA) was $70 million, against $17 million pro forma, with underlying Earnings Per Share of 3.6 cents. The improvement was attributed mainly to lower financing costs. Free Cash Flow to Equity was $93 million.

The Interim Dividend was 10.0 cents per share, up from 9.0 cents, and 25% franked.

Where the growth is coming from

TPG sells mobile and fixed services mainly to consumers under brands including Vodafone, TPG and iiNet, and supplies enterprise, government and wholesale customers. Mobile is the growth engine. Mobile service revenue rose 3.1% to $1,224 million, and mobile gross Margin rose 4.2% to $1,022 million.

Subscribers reached 5,806,000, up 64,000. Postpaid was flat at 2,846,000, while the Digital First segment grew 7.9% to 781,000 and wholesale-style MVNO services grew 25.1% to 214,000. Prepaid fell 30,000 to 1,702,000. Average revenue per user was $35.21, up 0.7%. The company expects second-half average revenue per user growth to exceed the first half after plan refreshes between May and August.

Home broadband was lower. Service revenue fell 1.9% to $827 million, and gross margin fell 4.5% to $298 million. The fixed base shrank 2.1% to 1,941,000, including 1,527,000 NBN services, down 2.6%. Fixed wireless, at 284,000, returned to growth in the second quarter, and more than 70% of it runs on 5G.

By segment, Consumer revenue was $2,215 million, down 0.8%, while Enterprise and Government/Wholesale revenue was $210 million, down 2.3%. Within that, business mobile revenue rose 3.2% to $98 million and wholesale mobile revenue rose 7.1% to $45 million.

Operating free cash flow rose 16.4% to $199 million, and rolling twelve-month return on invested Capital improved to 6.07% from 4.83%.

Guidance and our own arithmetic

TPG kept 2026 EBITDA guidance at $1,665 million to $1,735 million, excluding material one-offs, compared with $1,637 million pro forma in 2025. It also expects capital additions of about $750 million and operating expenses of about $1,020 million. Guidance depends on no material change in operating conditions.

This paragraph is our own arithmetic. With $821 million delivered in the first half, the range implies second-half EBITDA of $844 million to $914 million. That is above the first-half figure at both ends, so the second half has to improve on the first for the company to land within its range. The company also guides to depreciation and amortisation of about $1,280 million for the year, so EBITDA less depreciation and amortisation implies roughly $385 million to $455 million at the guidance ends, before interest and tax.

Balance sheet and investment

Debt to EBITDA was 0.8 times, down from 1.5 times, against a target below 2.75 times on the S&P basis. Borrowings were $1,435 million at 30 June 2026, up from $1,361 million at 31 December 2025, even though total facilities were cut by $400 million. Refinancing of FY28 maturities is expected in the fourth quarter of FY26. The announcement we reviewed did not give a net debt figure.

Cash Capital Expenditure excluding spectrum was $431 million, down 8.9%. The company expects about $650 million in 2027 and $550 million to $650 million in 2028. Spectrum licence renewals begin in 2028, which the company describes as manageable, and spectrum payments sit outside capital guidance.

Strategy and costs

Vodafone's net promoter score rose 12 points to 31 since June 2025, postpaid churn fell 0.3 percentage points, and coverage reached 99% of the population.

A regional network sharing arrangement, known as a multi-operator core network, has been in place since launch, and the company says port-outs have fallen since then. TPG is also engaging in an ACCC review of domestic roaming. MVNO wins include Zip, Swoop and Spacetalk.

On costs, TPG targets about $100 million of operating cost efficiency before Inflation by FY29. About $31 million was delivered in FY25, and it estimated real savings of about $15 million in 1H26 against 3.6% inflation, a reminder that cost-out must outrun price pressure.

Risks and what to monitor

The principal watch-points are the pace of home broadband margin recovery, which the company says depends on stabilising the NBN customer base, and whether mobile average revenue per user lifts after the plan refreshes. Retail Vision Network revenue per user fell to $4.70 from $11.17, a small base of 114,000 subscribers but a notable drop.

Regulatory outcomes, particularly the domestic roaming review, and competitive pricing among the three networks could also affect results. Separation costs for the fibre business run until the end of FY26.