print :



TPG results highlight NBN pricing issues

Why does a company that has just announced strong yearly results immediately get hit with a 22% drop in its share price? 

On 20 September TPG -Australia’s No 2 telco in the fixed broadband market- told investors it had increased its revenues by 88% and its net profit by 69% over the last financial year. But markets were not impressed. 

One reason, no doubt, was that a large part of this increase came from its takeover of the highly successful service provider iiNet, rather than from “organic” growth (i.e. growth outside acquisitions). But even more worrying to investors is the impact that NBN pricing will have on its future business. 

Industry analysts estimate that TPG is facing an increase in the costs in pays for wireline local network access of as much as 40% as its customers are migrated from Telstra copper to the NBN. 

Under a price regime set by the Australian Competition and Consumer Commission (ACCC) TPG currently pays an average of some $14.68 a month for access to Telstra’s local “loop”. But nbn is looking to receive an average wholesale revenue of $43 per user per month this financial year. That’s budgeted to rise to $56 by FY20 and perhaps more beyond that. 

Retail service providers have been increasingly vocal over the last few years about the threat NBN’s pricing presents to their viability but of the major players TPG is particularly vulnerable. 

Unlike Telstra and Optus, it does not have a mobile network to offset the impact of NBN wholesale prices on its fixed line business. And it isn’t enjoying the steady revenue stream that is flowing to Telstra from nbn under the Definitive Agreements. 

TPG has shown itself resourceful in the past and has already indicated it may explore opportunities for wireless bypass of the NBN as other companies are already doing. It has also come out in support of the current mobile players being forced to open up their networks to competitors – a move that would provide another option for broadband service provision other than the NBN. 

At present, though, it appears to be playing the role of the canary down the mine – sending an early warning of the dangers facing Retail Service Providers as the pace of migration to the NBN quickens.

What's New


Telstra EBA 2018
ACTU turns 90
May Day 2016
Optus EPA approved
Telstra EA Update
Optus award update


Reps training
Reasonable overtime
Vale Jojie Vivar
Changes to Bulletin
Christmas pay rises
Postal reform
Facebook bullying
Year in review
Vale Jim Armstrong


Happy New Year
Happy New Year
Vale Shane Morse
Meeting reminder
Coronavirus Update
Reps training
ACTU turns 90
Vale Jojie Vivar
May Day 2016
Facebook bullying
May Day 2015
Working In Heat
Your Union Petition
Save our Posties
Sensis Sell Off