TPG customers want a landline with their broadband

TPG customers prefer home phone bundles to stand-alone broadband.

TPG has found success with a consumer plan bundling ADSL2+ with a home phone line, with the package greatly outselling mobile and stand-alone broadband offers, according to the telco's financial results reported today.

TPG reported a strong half year overall, increasing net profits after tax for the six-month period ending 31 January to $90.1 million. That’s 15 per cent more than TPG reported in the same period last year.

TPG added 36,000 broadband customers in the half year, consistent with growth levels from the same period last year. It ended the half with 707,000 broadband subscribers.

TPG attributed the broadband growth to the success of its ADSL2+ with home phone bundle plans, which grew 61,000 customers in the half. That spike in customers was offset by a 25,000 customer decline in standalone broadband subscriptions.

And while TPG is still adding mobile customers, the growth of this business has slowed compared to previous periods.

TPG ended the half with 370,000 mobile subscribers, which was 10,000 more than it had on 1 August when the period began. That is relatively small compared to the previous half year period when TPG added 57,000 mobile customers.

Overall, consumer division profits grew by 17 per cent year-over-year, with TPG reporting $100.2 million in earnings before interest, taxes, depreciation and amortisation (EBITDA).

“This has been driven by ongoing organic broadband subscriber growth as well as an increase in contribution per subscribers to the Group’s home phone bundle plans,” TPG said.

TPG’s corporate division had a profitable half year, reporting $64.5 million in EBITDA. That is a 25 per cent improvement from the first half of 2013, and TPG said the growth is due to increased revenue and a better underlying margin.

TPG recently completed a $450 million acquisition of AAPT from Telecom NZ, but this occurred in February after the reporting period for the results released today.

TPG has caused some ripples of late with its plan to build fibre-to-the-basement infrastructure that would compete with NBN Co.

In its half-year results presentation, TPG said the FTTB rollout is "progressing," with construction in-progress in Pyrmont, Ultimo and the CBD in Sydney; Southbank, Docklands and the CBD in Melbourne; and Fortitude Valley and the CBD in Brisbane.

Also, TPG said it has "live trial customers."

NBN Co chairman Ziggy Switkowski has said the TPG plan could upset the NBN’s business case.

“The economics of NBN would be severely impacted,” Switkowski told a Parliamentary committee earlier this month.

“The policy says that the NBN … will be the exclusive wholesale provider of the National Broadband Network and it’s a policy that we are implementing. If there are infrastructure based enterprises that want to test the limits of that policy, they take a risk that NBN will respond in some way.”

Adam Bender covers telco and enterprise tech issues for Computerworld and is the author of a dystopian novel about surveillance. Follow him on Twitter: @WatchAdam

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