TPG Telecom as a major telco in Australia
TPG Telecom became the second largest telco listed on the Australian Securities Exchange (ASX) when they merged with Vodafone Hutchinson Australia last year. The merged company is the now the third largest mobile telco in the country, offering some attractive SIM plans and boasting of 5.8 million customers.
But TPG wasn’t always a major wireless carrier – in fact, before the merger, they were a Mobile Virtual Network Operator (MVNO) reselling phone plans on Vodafone’s network. Even then, however, the signs of a major telco were there – the company had made a number of acquisitions, taking over a number of smaller telecommunications companies and acquiring wireless spectrum over the years.
But expansion is expensive, hence the merger with Vodafone. Initially, that $15 billion merger was opposed by the ACCC until a federal judge approved it last year, leading to the formation of what’s now known as TPG Telecom.
Now, you’ll find a number of brands under TPG Telecom, such as Vodafone, TPG, iiNet, AAPT, Internode, Lebara and felix. The telco provides a range of services, including mobile plans, fixed voice and data services, NBN plans, and more for both personal and business customers. TPG Telecom’s fixed voice and data network is actually the second largest in the country after their numerous acquisitions, and their mobile network coverage reaches over 23 million Australians.
And with the TPG-Vodafone merger allowed to happen, the telco launched their 5G network last year. So far, they lag behind Telstra and Vodafone, however, but they are expected to make major strides in the 5G space this year.
David and Vicky Teoh established Total Peripherals Group (TPG) in 1986, and later merged with SP Media in 2008 to form the Internet Service Provider (ISP). The initial company focused on IT and sold OEM computers.
TPG acquired a number of companies, including Chariot (an ISP) in 2007, SP Telemedia in 2008, Soul Converged Communications, merged SP Telemedia in 2009, PIPE Network in 2010, AAPT in 2013, and more.
The telco also purchased spectrum, including two 10 MHz spectra of the 2.5 GHz in 2013. Although the TPG were an MVNO, they were expected to use acquired spectrum to launch a the fourth largest wireless provider in Australia.
However, TPG eventually had to merge with Vodafone in 2020 to make this happen. Now, the telco is no longer just an MVNO – the merger has formed TPG Telecom, the third largest wireless carrier in Australia.
TPG ownership, management
As stated, TPG was founded by David and Vicky Teoh. However, David Teoh stepped down in March of this year, but still holds 17 percent of the company’s shares.
While Mr. Teoh hasn’t given much insight into why he stepped down, he stated that it felt like the “right time… to hand over the reins and focus on other interests.”
TPG Telecom is expected to be led by Channing Fok eventually, who was Vodafone Hutchinson Australia’s former chairman. But right now, Iñaki Berroeta, who was formerly the CEO of Vodafone, is the CEO and managing director of TPG Telecom.
The future of TPG
TPG Telecom’s future is focused on 5G, customer service improvements, and environmental improvements such as their pledge to reduce their carbon footprint and rely on renewable energy for all of its electricity sources by 2025.
After their $15 billion merger with Vodafone was approved last year, the telco launched their first 5G site in Parramatta. Now, according to CEO Inaki Berroeta, TPG Telecom have surpassed half a million customers on their 5G network. The telco claims their 5G network has coverage in over 500 Australian suburbs, and they plan on covering 85% of the population within Sydney, Melbourne, Brisbane, Perth, Adelaide, and Canberra.
TPG Telecom have also announced their 5G fixed wireless service will be launched on an invite-only basis this month. The telco will run this service on their newly acquired mmWave 5G spectrum, which should boast extremely fast speeds. And unlike their competitors, TPG Telecom is openly marketing their 5G fixed wireless service as a “mass market” alternative to the NBN.
For those who work in the industry, the TPG / Vodafone merger seemed like an inevitable ‘no brainer’ that would happen sooner or later. I am in a share club with my friends and I was so sure of it that I bought shares in TPG in the hope the price would increase when a merger was announced. Luckily, I guessed correctly and won that round of our competition.
Telco is about scale, and that’s especially true in Australia. We are such a large island country that covering the geography in mobile phone masts and broadband services is very expensive. And in addition, there are only 27 million of us to buy those services. Merging is a way to get the reduced costs of managing and upgrading that infrastructure and taking the competition to Telstra and Optus. It was a good move – whatever Rod Simms at the ACCC said about it – and we will all ultimately benefit from having the larger TPG/Vodafone company to offer services alongside those two still relatively large competitors.