Companies that have multi-year investment horizons, with longer-dated payoffs, are generally viewed very unfavourably in higher interest rate environments.

TPG are spending lots of money to upgrade (5G) and improve operational efficiencies (transformation programs).

But APRU’s are at least headed in the right direction, with the industry behaving more rationally.

Mobile sub growth also looking much better. Fixed broadband competition is fearsome, but low margin, and TPG are getting a bunch of fixed wireless subs at a much better margin.

Of course the worry is that the capex doesn’t produce the desired return, or that competition erodes it all away, and that all your left with is a geared balance sheet and pressure to abandon the dividend. Certainly possible. Teleco’s have done it before.

But, should TPG execute, the earnings growth could be quite meaningful. Some degree of pricing power (for the sector, not really at the stock level) + population growth + (handwaving) IoT + cost out.

Still, fair to say the market ain’t interested, and is highly skeptical of FY26…

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