TPG plans to expand fibre network
TPG Telecom will roll out fibre-optic cables to 500,000 apartments across Australia as the junior carrier seeks to take advantage of the change in broadband policy under the new Coalition government.
The company plans to extend its existing fibre networks to basements of apartments in major capital cities, promising NBN-like internet speed of 100 megabits per second.
The Coalition's broadband policy encourages internet services providers such as TPG to invest in infrastructure to speed up the delivery of broadband to households.
TPG's foray into the fibre network came as it reported a record net profit of $149.2 million for the financial year ended July, a 64 per cent increase from the previous year. Strong subscriber growth fuelled the profit lift, with TPG adding 76,000 customers in the past 12 months.
The company declared a fully franked dividend of 7.5¢ a share for the financial year.
TPG's mobile phone subscribers increased by 105,000, compared to a rise of 54,000 in fiscal 2012. The company expects earnings before interest, tax, depreciation and amortisation for the 2014 financial year to be between $290 million and $300 million, compared to $293.1 million in 2013.
Earnings from TPG's corporate division, which provides wholesale and corporate telecommunications infrastructure under the PIPE Networks brand, grew more than 10 per cent last year, largely due to improved margins from investment in the fibre network.
TPG shares jumped 14.7 per cent to $4.245 at the end of trading day. Citi analyst Justin Diddams labelled TPG's latest result as solid, coming in ahead of market expectations.