Business Description:
TPG Telecom Limited (TPM, formerly named SP Telemedia Limited) is a multi-media full service telecommunications company providing voice, internet and data solutions to a wide range of customers from consumer through to SME, corporate and government sectors.

Strategy Analysis:
TPM’s business is shifting towards the corporate market after the PipeNetworks (PIPE) and Intrapower (IPX) acquisitions. Consumer contributes to 56% of total EBITDA, down from 80% in 1H10. This is a positive as earnings are less reliant on the highly competitive consumer broadband market. In the retail segment, TPM’s focus is on subscriber acquisition through lower pricing. This is achieved by realising cost savings from the acquisition of PipeNetworks (PWK). PWK´s submarine cable and existing fibre network in major cities lower TPM´s wholesale costs. Cost savings are passed on to consumers through lower priced plans. TPM is also ramping up new product offerings such as IPTV, mobile and unlimited international and domestic voice calls. TPG Telecom reported NPAT up 40% to $78.16m for the year ended 31 July 2011. Revenue from ordinary activities were $574.51m, up 13% from last year. Diluted EPS was 10.1 cents compared to 7.6 cents last year. Net operating cash flow was $167.65m compared to $172.31m last year. The final dividend declared was 2.25 cents fully franked, taking the full year dividend to 4.5 cents compared with 4 cents last year. During the first quarter of FY12 the Group will formally complete its acquisition of 100% of the shares in IntraPower, whose 'Trusted Cloud' platform will complement the Group's network infrastructure and enable further products and services to be offered to the Group's customers.