TPG Telecom secures first-time 'BBB' rating with stable outlook from Fitch

TPG Telecom Limited (TPG) has received a first-time 'BBB' Long-Term Issuer Default Rating with a Stable Outlook from Fitch Ratings, announced on October 8, 2025. This rating acknowledges TPG's strong competitive standing as Australia's third-largest mobile operator and second-largest fixed broadband provider. The stable outlook is supported by Fitch's expectation that TPG's EBITDA net leverage will decrease to 1.6x by the end of 2025 and remain below 1.8x through 2028.

The improved financial position follows significant debt repayment, primarily funded by A$1.7bn in proceeds from the sale of its enterprise, government, and wholesale (EGW) fixed business to Vocus Group Limited. Gross bank debt is projected to reduce to A$1.7bn by end-2025 from A$4.1bn in 2024. TPG also plans to repay a further A$600m in bank debt through a new handset receivable financing program, with 25% of the total HRF debt (assumed at A$700m) included in gross debt calculations.

TPG also expects strong pre-dividend free cash flow due to reduced capital expenditure needs after divesting its fixed fiber network and securing long-term access to a broader mobile network with Optus. Despite a smaller market share (17% mobile, 23% NBN reseller), network sharing agreements are anticipated to narrow service gaps and improve operating leverage, with an expected EBITDA margin of around 25% between 2025 and 2028. TPG intends to distribute regular common dividends of A$0.18 per share annually, totaling approximately A$335m in 2025.