TP TPG.AX TPG Telecom Limited Loading... : Investor Sentiment and Bull/Bear Views

The author argues the $5.25b Vocus sale removed TPG's high-margin fibre/enterprise business, leaving a lower-margin mobile and NBN-resale business that earned only about $7m PBT on roughly $5b of revenue. He notes the remaining business must also carry fibre rent under the TAWFA and that TPG's own FY25 pro forma ROIC of 5.42% is below the original 6% starting hurdle, so it is not clearly earning its cost of capital. He therefore sees the dividend and any rerating as dependent on the consumer business lifting margins, while acknowledging the remaining business can still work.

The author, a TPG Telecom holder, argues the stock is stuck in a trading pattern below $4 and that catalysts for a higher share price would be dividend increases and improving mobile momentum. Recent wholesale SIO wins and digital prepaid could make the next results look positive, but postpaid must hold up against NBN weakness.

The author argues TPG has destroyed shareholder value since the 2020 merger, remaining roughly 28% behind even after counting the $1.61 capital return and dividends. They warn that reported ROIC improvement is partly flattered by asset sales and handset receivables financing that reduce invested capital, while the fibre sale-leaseback leaves TPG negotiating for coverage it no longer owns after 15 years. Flat Vodafone postpaid and migration to cheaper digital brands may also erode margin, though the author flags uncertainty in the deck's undefined cost ratio behind their margin-loss estimate.