TPG investor says NBN should be shut down, bullish about prospects for 4th mobile net
The billionaire director of TPG and representative of its biggest corporate investor,
Rob Millner, says that the NBN should be closed down and thinks that analysts have
underestimated the prospects for TPG's proposed fourth mobile networks in Australia
and Singapore.
Millner, who chairs Soul Pattinson which owns 25% of TPG, told Alan Kohler’s investment
website the Constant Investor that the NBN should never have
been built. He said: “It’s been flawed since day one. It’s just ridiculous.
The money that’s been wasted and we were just talking now, people
are not getting the capacity. I know our switchboard at TPG is permanently
under pressure from people once they have to switch over to
the NBN, they’re ringing back up to TPG and saying why can’t we go
back to you because we’re not getting the speed we had with TPG. It’s a flawed system
and I think originally the government thought it was going to be a world-beater and
they were going to float it off and pay for it. But the way it’s going now they’ll be lucky
to get anything for it.”
Millner said that he believed the market did not understand that the NBN was compressing
telco margins across the board, not just at TPG but also at Telstra and Vocus.
“To me it would have been cheaper if the NBN gave everybody in regional Australia a
satellite dish,” he joked. “It wouldn’t have cost $55 billion.”
Millner said that he saw TPG’s advantage being in infrastructure ownership, especially
with its strong backhaul network in Australia. Hence the confidence in moving
into the mobile network arena.
“We did pay money for spectrum and a lot of people, again, don’t understand and
the cost of building this network will not be as great as what people think it will be. If
you look at the recent last fourth player that started up in the French market, they’ve
now got 16% of the market. We’ve already got enough mobile customers now to break even.
We’ve got over 500,000 mobile customers now. It’s going to be a couple of years
but I think in a couple of years’ time you’ll see a completely different TPG,” he said.
Millner said there was even a better case for market entry in Singapore. “There’s an
opportunity there for a fourth player to come in where (TPG CEO) David Teoh’s very
confident we can make Singapore work. You’ve got to remember the Singaporean government
is very favourable for new business and you get a lot more support from the
Singaporean government than you get from the Australian government when you go up
there to run a business. Again, we’re very, very confident in three or four years you’ll
see us as a fourth competitor up there with a good percentage of the market,” he said.
On TPG CEO and 35% shareholder David Teoh, Millner described him as “the
most expert telecommunications person in Australia. He knows what he’s doing, he’s
built a very, very good team of people up around him and also when we bought those
acquisitions, we got some very, very good people from those acquisitions as well. David runs a very good show and I think you’ve only got to look at the performance of the
company over the last nine years. I think it is.”
TPM Price at posting:
$5.51 Sentiment: Buy Disclosure: Held
