TPG prepares for mobile network trials, eyes 5G services

Rolls out small cells in Sydney and Melbourne

TPG expects to begin trials of its new Australian mobile network in the second half of 2018. The telco’s mobile network build is “well underway,” CFO Stephen Banfield today told a briefing on TPG’s first half results.

“We expect to have a very large volume of sites installed by the second half of 2018, when we are hopeful at that time to launch trial services,” the CFO said.

In the six months ending 31 January, TPG’s capital expenditure reached $791.7 million, which included a $594.8 million instalment for the 2x10MHz of spectrum in the 700MHz band that it picked up at auction last year. The capex also included $33.8 million on the rollout of mobile networks in Singapore and Australia.

TPG last year revealed it would build a new mobile network in Australia.

“The company has been extremely busy working on its mobile network builds in both Australia and Singapore,” Banfield said.

“In Australia site installation is well underway,” the CFO said. “We have sites installed already in both Sydney and Melbourne. The initial batches of installations have enabled us to refine our small cell deployment model, which should allow us to accelerate the delivery of a significant volume of small cell sites in the coming months.”

“Our agreements with partners who are providing our small cell site access are now substantially complete,” he added.

The network rollout will provide a “platform for 5G services,” the TPG executive said.

“We have a combination of high-density small cell sites with a Cloud-RAN architecture, a virtualised network core and, of course, our fibre. As 5G network elements become available in the market, we will have the optimal architecture to take advantage of them.”

Banfield said TPG will be “looking closely” at the rules for the upcoming auction of 3.6GHz spectrum; 3.6GHz is considered prime spectrum for the rollout of 5G services.

Broadband subscribers dip

The telco registered a dip in broadband subscribers. Although TPG broadband customers rose from 957,000 at the end of July 2017 to 962,000 at the end of January 2018, iiNet subscribers dropped from 979,000 to 966,000 in the same period.

TPG’s fibre to the building customer based has increased, the telco revealed, growing from 37,000 to 45,000 in the first half.

“We have added more apartments to our footprint; the number is now close to 190,000,” Banfield said.

TPG general counsel Tony Moffatt said that the telco was uncertain about the future of regulations requiring functional separation for telcos that operate ‘superfast’ broadband networks that compete with the National Broadband Network.

“The truth is that we don’t where the regulations are at – they’re somewhere in Canberra,” he said.

“They may or may not get passed. We’re quietly hopeful that the politicians are thinking about the benefits to Australian consumers and the Australian economy of infrastructure based competition and perhaps they’re rethinking these regulations.”

TPG reported net profit after tax of $198.7 million for the half. EBITDA was down $55.2 million on 1H17 but underlying EBITDA crept up from $417.6 million to $418.2 million.

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