from the australian

Patience required.


TPG Telecom has posted a bumper profit result after plundering broadband customers from its rivals.
It is now eyeing the regional first rollout of the National Broadband Network as fresh ground to continue its customer trawl.

TPG posted a 216 per cent rise in profit to $55.7 million for the year ended July, as more than 100,000 new broadband customers flocked to its network.

But despite the promising result, TPG shares were punished yesterday as a soft set of guidance figures for the year ahead sent concern through a market that was uncertain the telco would maintain its momentum.

TPG's earnings before interest, tax, depreciation and amortisation for the year grew 42 per cent to $171.1m, but it only set a $210m to $216m guidance range for the year ahead.

"Guidance was a little weak, relative to consensus numbers," one analyst said.


"TPG is a company priced for strong growth, so if they disappoint a little bit, they will get taken down a notch."

TPG shares slumped 18c, or almost 10 per cent, to close at $1.70.

TPG boss David Teoh attributed some of the market reaction to aggressive broadband pricing from the likes of Telstra, which he said had significantly increased competition in the telco sector.

"Everyone is changing their broadband prices and it's affecting us all. If you look at the numbers, we added 100k in the last 12 months so no one is going to sit there and let us keep taking their customers," Mr Teoh told The Australian. "The next six months is very critical."


http://www.theaustralian.com.au/business/tpg-telecom-posts-a-bumper-net-result/story-e6frg8zx-1225927535648