Job Cuts At TPG Telecom After 40% Slide in Profit
Australia’s third largest telco TPG Telecom’s half-year result for the period ended June 30, 2024, shows that its net profit has slipped 40 per cent to $29 million, compared to $48m in the corresponding period last year.
The latest results have meant that the company is now undertaking $20m worth of cost cuts – including axing 120 roles this month. The company will take a one-off restructuring cost of $7 million to $9 million related to the job cuts.
TPG’s chief executive Inaki Berroeta said he wanted to flatten operating costs over the next six months.
“We are taking action on operating costs, removing 120 roles from the organisation this month as we look to offset the impact of sustained inflation of recent years,” said Berroeta.
The company’s finance costs jumped by almost 27 per cent due to higher financing costs from a new tower lease agreement entered in the second half of FY23 and higher interest rates on bank borrowings.
The number of its mobile subscribers rose by 64,000 to 5.2 million, boosting its mobile services revenue by more than 7 per cent to $1.12 billion. The numbers include the addition of 98,000 Lyca customers.
As for its 5G rollout, more than 3,400 mobile sites were upgraded to 5G. The rest of its metropolitan sites are scheduled to be upgraded by the end of 2026.
TPG’s average revenue per user for mobile customers rose more than 4 per cent to $34.40 per month, but the company added that some customers were downgrading to cheaper plans.
The number of its internet broadband subscribers fell. NBN subscribers slid by 41,000 to 1.73 million, but there was an 18,000 increase in the number of fixed wireless subscribers that was helping to offset the competition the company was facing in the national broadband market. TPG’s share of the Australian broadband market fell to 20.5 per cent in the quarter ending June 30, from 20.7 per cent in the previous March quarter.
In July, the ACCC started a review of a landmark A$1.6 billion network sharing deal between TPG Telecom and Optus.
Under the deal signed in April, TPG would expand coverage to 2,444 mobile network sites in regional Australia, up from 755, and would gain access to Optus’ regional 5G network as it is rolled out. TPG expects to get the regulator’s views on the Optus deal on September 13.