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Coronavirus Hits Merged TPG/Vodafone Hard

COVID-19 has taken a sledgehammer to TPG Telecom (formerly Vodafone Hutchinson Australia), with a $117 million loss in the six months to 30 June 2020.

TPG, which merged with Vodafone this year, saw a 12 per cent decrease in revenue to $1.513 billion, and an eight per cent drop in EBITDA to $546 million (this is solely from former Vodafone results, not counting four days of contributions from the former TPG Telecom).

According to Iñaki Berroeta, CEO of TPG Telecom, the coronavirus caused significant hits to revenue, particularly in the mobile sector, with an 80 per cent decrease in roaming margins from international travel restrictions; reduced sales channel operations including retail store closures; and customer financial hardship support initiatives all impacting the bottom line.

“We simultaneously supported our customers to help keep them connected through COVID, moderated the financial impacts of the pandemic on our own business, completed the merger and commenced our 5G rollout after an 18-month delay due to the vendor restrictions.

“While our results reflect a negative impact from COVID on the mobile sector, they also demonstrate the relative resilience of the industry and our capacity to continue to deliver the essential services which our customers rely on,” he said.

Prepaid and postpaid mobile connections also saw respective declines of 30 and 20 per cent; however, fixed broadband services improved with more Australians choosing to work from home. Vodafone’s NBN customer base grew 32 per cent to 150,000 from 31 December to 30 June, and TPG fixed broadband customers grew two per cent to 1.971 million.

“In the June 2020 quarter, our Group achieved the highest market share of net NBN growth of any service provider, with one third of new NBN subscribers for that quarter taking a TPG Telecom Group branded service.

“Australian customers are relying on their telco services more than ever and we have also started work to bolster our brands, including new competitive plans and a bold new brand campaign for Vodafone,” said Berroeta.

According to the CEO, the TPG-Vodafone merger, completed shortly before the end of the financial year, has enabled the business – which never posted a profit as Vodafone – to better weather the COVID storm.

“Through our increased scale and strength as a merged company, we are well-placed to continue to support customer needs, while progressing our plans to deliver the benefits of the merger for customers and shareholders,” he said.

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