Is this the end for iiNet? TPG to dump brands as profit slides
TPG Telecom plans to dump some of its brands and products to cut costs after its interim profits slid 71 per cent to $48 million.
The telecommunications group, which manages brands like Vodafone, iiNet, AAPT, Internode, Lebara and felix, said it would “simplify its brand portfolio, rationalise products and customer journeys, increase digitisation and streamline internal systems and platforms” to boost profit margins.
TPG, which operates Vodafone and other telecom brands in Australia, will dump some of those brands to cut costs. AFR
The program is expected to generate $140 million of “net cash benefits” by fiscal 2027 compared with fiscal 2023 but will cost the company $15 million to $20 million annually in fiscal 2024 and fiscal 2025.
CEO Inaki Berroeta has already started slimming down its operations, angering loyal broadband internet customers with its decision to stop providing email accounts.
TPG is also in exclusive talks with the Vocus Group to sell some of its fibre assets in a deal valued at $6.3 billion. On Thursday, TPG said the potential sale of its fixed infrastructure assets would “unlock value and create a leaner, more focused TPG”.
TPG’s net debt is running at $3.9 billion, up from $3.6 billion a year earlier.
Vocus, which specialises in fibre networks and is owned by Macquarie Infrastructure and Aware Super, has offered to buy TPG’s Vision Network, which manages fixed broadband infrastructure, and other assets in TPG’s enterprise, government and wholesale business.
Vocus has until September 6 to do due diligence. If the deal goes ahead, TPG’s future earnings would mostly be derived from selling mobile plans under the Vodafone brand, according to Morgan Stanley. TPG merged with Vodafone Hutchison Australia
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