TPG Telecom will introduce fibre-optic cables to half a million apartments across Australia as the junior carrier seeks to take advantage of the change in broadband policy under the new government.
The company plans to extend its existing fibre networks to basements of apartments in major capital cities, promising to deliver internet speeds like the national broadband network, of 100 megabits a 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 homes.
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 rise from the previous year.
Subscriber growth fuelled the profit rise, with TPG adding 76,000 customers in the last 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 in the 2014 financial year to be between $290 million to $300 million. This will be up, 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 by more than 10 per cent last year.
The growth was largely due to improved margins from investment in the group's 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.
The telco has 671,000 broadband subscribers and 360,000 mobile phone customers. TPG made numerous investments in infrastructure, including extending its domestic fibre network by 800 kilometres, and acquiring extra capacity from an international cable linking Sydney and the US.
This year TPG acquired some allocation of spectrum to provide wireless broadband services.