TPG Telecom Ends Talks with Vocus Group Over $4 bn Fibre Asset Sale

TPG Telecom announced on Monday that discussions with Vocus Group regarding the potential sale of non-mobile fibre assets worth approximately A$6.3 billion ($4 billion) have been terminated. The breakdown in negotiations stems from the inability of the parties to reach an agreement on the operating model and commercial terms.
TPG Telecom customersIn August, Vocus Group, backed by Macquarie, had presented a non-binding offer to acquire specific enterprise, government, and wholesale (EGW) assets, along with associated fixed infrastructure assets, including the Vision Network wholesale broadband business. Despite TPG extending the due diligence period in September, negotiations failed to progress, and the deadline expired in October.

In a statement released on Monday, TPG Telecom acknowledged the complexity of the proposed transaction and cited the lack of alignment on operating models and commercial terms as the primary reasons for the unsuccessful negotiations.

TPG Telecom expressed its commitment to its ongoing strategic review and highlighted ongoing strong interest from potential investors in the company’s fixed infrastructure assets. The failed deal with Vocus follows another setback for TPG, as its asset swap arrangement with Telstra Group was thwarted by the country’s antitrust regulator and the Australian Competition Tribunal.

Under the blocked asset swap deal, Telstra was slated to acquire spectrum and transmission towers from TPG, while TPG would have retained the rights to sell 4G and 5G coverage using Telstra’s infrastructure. TPG Telecom now faces the challenge of navigating new opportunities for its fixed infrastructure assets amid the shifting landscape of the telecommunications industry.

TPG Telecom’s service revenue was $2,288 million for the half-year ended 30 June 2023, an increase of $98 million or 4.5% compared to HY22 ($2,190 million).

TPG Telecom’s Consumer Mobile service revenue was $956 million, an increase of $74 million or 8.4% compared to HY22 ($882 million). This increase reflected a higher number of subscribers and initial benefits from the Postpaid Mobile base repricing.

TPG Telecom’s Fixed service revenue was $871 million, an increase of $12 million or 1.4% compared to HY22 ($859 million). This reflected a positive contribution from a larger Fixed Wireless subscriber base and six months’ contribution from modest price increases for some NBN plans.

TPG Telecom’s Enterprise, Government and Wholesale revenue was $557 million, an increase of $73 million or 15.1% compared to HY22 ($484 million). Enterprise and Government service revenue growth was primarily driven by TPG Telecom’s Fast Fibre and NBN Enterprise Ethernet services.