Yesterday, TPG & City of Adelaide announced the launch of its Ten Gigabit network (See attached media release).
40 buildings are now ready with another 160 buildings coming online shortly.
The pricing is as follows:
$399 + GST for 1Gbps service
$598 + GST for 10Gbps service
TPG's current general offering of Fibre400 ($399 + GST for 400Mbps service) is already very competitive.
This special offer for Adelaide CBD businesses is even better.
It will be very hard for the competitors to match these prices, let alone beat them.
Each new business customer signing up for a service is worth approximately 80 retail broadband customers. And more importantly the margin derived from them is much higher than the margin of the retail customers.
It is also worth mentioning that all of the extensions to various buildings that TPG is currently doing in Adelaide CBD will also assist them in the rollout of their small cell networks in that city, which will happen soon.
Although the earnings contribution of this project to FY2018 will be small, I don't believe the current EBITDA guidance of $800-$815m for this year includes contributions from this project.
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As for mobile rollout in Australia, TPG currently has 156 sites proposed, with the majority of the new sites located in Sydney & Melbourne CBD. These new sites are mainly located in lamp posts and will form the small cell network that TPG is building.
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With TPG quietly continuing to achieve their various operational targets, I have decided to increase my TPG holding by another 4%.
TPM Price at posting:
$6.14 Sentiment: Buy Disclosure: Held
