Good morning everyone. This is Paul Hutton speaking from TPG Telecom's Investor Relations team.

Thank you for joining us for the presentation of our 2025 full year results. We acknowledge traditional custodians of country throughout Australia and the lands on which we and our communities live, work, and connect.

We pay our respects to their elders, past and present. Our CEO, Iñaki, will present our results highlights and strategy update.

Our CFO, John, will then present a detailed review of our financial performance. Iñaki will then discuss our outlook before we open for Q&A.

Thanks, Paul, and good morning, everyone. 2025 was a milestone year of transformation, simplification, and, most importantly, the delivery of our best ever network for customers.

We launched the regional network sharing arrangement with great success. We completed the sale of fiber infrastructure and EGW fixed operations, and we used the proceeds to execute capital management initiatives, delivering a stronger and much lower risk financial position.

It was a year of market-leading trading performance in our core mobile business, despite a significant slowdown in the broader market. Our subscriber growth accounted for the majority of the net adds in the industry as we increased our market share, led by our digital-first subscription brands.

On top of this, we are delivering cash flow and ROIC improvements. This is driven by more infrastructure sharing and efficient asset utilization, by the cost benefits of continuous business simplification, and the conclusion of the transformational investment cycle of recent years.

Customer well-being is our priority. Every day, our networks are essential to how Australians live, work, and connect.

We are committed to investing to ensure we are there when our customers need them. Our industry needs regulatory policy that incentivizes that investment, not stifles it.

Finally, we are providing guidance for 2026 for continued EBITDA growth driven by mobile service revenue growth and operating cost discipline. We are positioned strongly to deliver shareholder value in 2026 and the years ahead as a more streamlined and focused business.

Our strategy has four pillars: to run networks smarter, invigorate brands and services, make it easier for customers, and become faster, simpler, and stronger. As a result, customer and network experience is thriving, and customers are responding positively to our more distinct, simpler range of brands and plans.

We are delivering growth with a more controllable, predictable, and derisked cost base. We are confident these trends will continue in 2026.

It has been a journey of material investment to transform our network, platforms, and capabilities, delivering a simpler, more dynamic business. We are seeing the results, and we expect to see ongoing improvement in the years to come.

Nowhere is transformation more apparent than in customer network experience. Let's start with the physical changes we have made.

The regional mobile expansion doubled the area we cover, increased our national sites by 35%, and lifted our population coverage to 98.5%. In addition, 81% of the sites in the TPG-owned network are now converted to 5G, covering 91% of the population.

Third-party research tells you there is increasingly little difference between networks in Australia. TPG Telecom delivers ours with a significantly lower cost structure.

Network consideration among non-customers is also rising, and importantly, churn is down for both consumer and business customers. This churn reduction was one of the main objectives of the regional sharing arrangement, and we are achieving it.

Consistent delivery of network and customer experience means consistent delivery of financial results. Simply, we are winning a growing share of the mobile customers available at higher ARPU, we are growing mobile service revenue consistently.

Leveraging our lean cost base, we can then grow profit, offsetting the impact of initiating the regional sharing arrangement in the year. The way we are managing our assets and our capital is delivering a growing cash yield for our shareholders from a transformed financial position.

This year, we returned more than $3.3 billion to shareholders, including our ordinary dividend, and derisked future profit by paying down $2.7 billion of debt. Dividends, now franked at 30%, are targeted to grow from here in line with sustainable growth in profit and cash flow.

We will move toward increased dividend franking over time. Let's now look at mobile performance in more detail.

This was a very strong result as we consistently increased our share by providing the products that customers want across a deliberately differentiated multi-brand portfolio. Our expanded regional network has unlocked competition and choice in parts of the market that were previously underserved.

That impact is clearest in our digital-first subscription brands, where latent demand for simple, value-led plans has translated into strong subscriber growth. Mobile service revenue was up 4.2% to $2.423 billion, with gross margin up 1.7% to $2.002 billion.

Excluding the cost of regional sharing arrangement, which we expect to more than make up through revenue in the future years, gross margin was up 3.6%. Growth accelerated in the second half, reflecting the timing of plan refreshes and the strong momentum in our digital-first subscription brands.

We always said 2025 would be about focusing on market share growth off the back of the expanded network, but we still delivered solid growth in ARPU. The greatest growth, at 10.7%, was in the digital-first subscription brands—felix, where we see customer upgrade to higher-tier plans using the app, and TPG and iiNet, where we saw the flow-through benefit of plan refreshes from late 2024.

We recently undertook a tranche of price increases on some back-book plans in Vodafone postpaid, as well as in TPG and felix mobile. The digital-first subscription segment also led our subscriber growth, with 113,000 net adds, while there was also solid growth in traditional prepaid segment.

Our total subscriber growth of 228,000 customers, or 4.1%, was approximately three times Australian population growth in 2025 and higher than the other two MNOs combined. We are winning a record share of customers relative to our competitors, and that's against a reduction in international migration where we are historically strong.

Vodafone continues to play a critical role as our full service brand, anchored by handset offers, international roaming, and exclusive offers and partnerships like Live Nation. At the same time, our digital-first subscription brands are capturing growth where the market is expanding fastest.

This portfolio approach allows us to grow share, protect margins, and follow customer demand, and is working. Now turning to home broadband.

Gross margin and AMPU increased in fiscal year '25, supported by mix shift to on-net fixed wireless and higher-tier NBN plans. The market remains structurally challenged, but our 5G Standalone launch should expand our fixed wireless addressable market by at least 15%.

That will support base growth in fiscal year '26. Our subscriber numbers in NBN were again down year-on-year, reflecting the ongoing impact of non-telco players and aggressive volume-driven resellers.

This decline slowed in the second half. There has been considerable fragmentation in the NBN market, but recent industry deals suggest signs of maturation.

Our role in that will be to remain disciplined, offering simple, great value plans, focusing on the convergence value of NBN, while continuing to grow fixed wireless. Our customer well-being strategy is integral to our success and how we build long-term trust with customers.

We have an industry-leading approach in areas like domestic and family violence, First Nations support, accessibility, financial hardship, and responsible selling. We are also leading the industry with the introduction of customer well-being specialists across our stores and in our main contact center in Hobart.

These specialists are trained to support more vulnerable customers, helping ensure the right outcomes for them and for our people, and we are extremely proud of the work they are doing. I will close on the regulatory environment before handing to John.

We support policy settings that sustain network investment and competition. For spectrum renewals, we are advocating efficient, revenue-linked structures and renewal timing aligned to license dates, rather than the large upfront payments that can divert capital from network investments and improving customer experiences.

I will now hand to John.

Thank you, Iñaki, and good morning, everyone. FY25 marked a year of structural change, with a simpler asset base, materially stronger cash generation, and a significantly strengthened balance sheet.

My first slide shows a positive trend across our key financial metrics. I will be talking about continuing operations unless I say otherwise.

When I talk about pro forma, that's as if the new commercial agreements with Vocus were in place for the whole year, which provides the most relevant baseline for FY26. Service revenue continues to grow despite slowing industry growth, and was up 2.2% to $4.179 billion.

This comes off the back of strong mobile subscriber growth across the consumer, business, and wholesale segments, and ARPU growth. Gross margin and EBITDA were both up despite the first-year costs for the expansion of our regional mobile network.

As we noted when we gave guidance for the year, those costs came ahead of the additional revenue growth we are seeing from the bigger network. Adjusting for those costs, pro forma gross margin would have been up 3.6%, with growth of 4.2% in the second half.

EBITDA on our guidance basis, which is pro forma and excluding material one-offs, was up 2% to $1.637 billion, above the midpoint of our guidance range. That would have been 5.7% without the regional expansion costs, and again, this was stronger in the second half at 6.8%.

Our EBITDA performance also highlights discipline in operating costs, which were flat, excluding one-offs associated with capital management and restructuring. Underlying NPATA and EPS, which are pro forma and exclude material one-offs and customer base amortization, were $69 million and 3.7 cents, respectively.

Turning to dividends. This slide shows ordinary dividends declared of 18 cents per share for the year, and that's now franked to 30% for the final dividend.

We declared 27 cents per share in the year, including the special dividend. ROIC was up a solid 0.66 percentage points to 5.42% on a pro forma basis, primarily driven by greater capital efficiency.

Through the Vocus transaction, we sold highly depreciated assets with very little growth. As a result, we expect strong growth in ROIC because we retained our higher-growth business just after the high point in its investment cycle.

Cash flow outcomes in the year were extremely strong. This reflects proceeds from the Vocus transaction and the new handset receivables financing program, as well as lower CapEx, spectrum, and borrowing costs.

My next slide is a profit summary. A quick note on hardware revenue, which is up 5.6% while we maintained overall hardware margin.

That's consistent with our objective to retain our natural share of handset customers, and is positive for the lifetime value of our postpaid base. I also draw your attention to operating costs halfway down the table, which at $1.031 billion were up just 0.5%.

That's a strong outcome against the objective to keep OpEx below inflation in FY25, given the average trimmed mean CPI was 3.3%. We are on track to deliver our target of $100 million of real-terms cost savings in the four years to FY29.

Savings reflected the benefit of lower network and maintenance and support costs, a lower FTE base as we deliver continuous business simplification and IT modernization. This was with a very deliberate increase in marketing costs.

I am very pleased with our track record in operating cost discipline. Turning to depreciation and amortization, the modest pro forma growth results from an increase in the depreciable asset base due to peak CapEx reached in 2024.

We expect similar D&A growth in FY26 on a pro forma basis. Now turning to EBIT and financing costs, where it's important to understand the difference between statutory, continuing operations, and pro forma.

Pro forma shows the impacts in both direct costs and lease depreciation and interest of the new commercial arrangements with Vocus as if they'd been there all the time. Continuing operation includes these impacts for only five months in FY25, with obviously no such impact in FY24.

The FY25 pro forma EBIT growth was 3.8%, with total net financing costs down 0.9%. The financing cost run rate for FY26 will of course be much lower.

That's firstly because bank borrowings are now materially lower. It's also because of the new handset receivables program, on which financing costs for the back-book sale were recognized upfront in October, whereas we only got one quarter of savings in FY25 from the bank borrowings we repaid.

It's also important to note there were income tax credits in FY25 arising from R&D tax credits and previously unrecognized tax losses. Now turning to cash flow, where momentum is very positive.

This slide includes both continuing and discontinued operations, as that's cash that was available to shareholders. Growth of 25.5% in cash flow from operating activities reflected the proceeds in working capital of $687 million of the new handsets receivable financing.

This more than offset the loss of earnings from the assets sold to Vocus from August onwards and the commencement of payment of cash tax. Operating free cash flow almost doubled to $1.291 billion, reflecting the additional benefit of lower CapEx.

Free cash flow to equity was $5.751 billion, enabling the extensive bank borrowings repayment and capital return in the period. Please note the subordinated note component of the handset receivables financing, which is the part that stays on our balance sheet, comes through investing cash flow.

In net terms, the impact on our free cash flow to equity of that program was $594 million. From here, the year-to-year impact of the handset receivables financing program should not be material.

Of course, this all depends on the overall handset market and supply chain conditions. In summary, while this year's one-off Vocus transaction and handset proceeds are not recurring, the underlying business is now generating materially higher recurring cash from a smaller asset base.

Momentum is projected to be strong from expected growth in service revenue, continued tight cost control, lower CapEx, and much lower borrowing costs. The balance sheet changed a lot in 2025, delivering an efficient asset profile on which we expect to grow returns over time.

The highlight, of course, was the material reduction in our bank borrowings from $4.1 billion to just $1.361 billion, significantly reducing our financial risk. Trade and other receivables were down as a result of the handset receivable financing program.

PP&E and intangibles were down almost $4.4 billion on aggregate, reflecting the transfer of assets to Vocus or derecognition of non-cash intangibles such as goodwill. The increase in deferred tax assets in the period may seem counterintuitive, as we utilized historical revenue losses against the gain on sale for the Vocus transaction.

However, outside of normal movements, we disposed of a net deferred tax liability and recognized a new net deferred tax asset associated with the new fiber access agreement with Vocus. This was also reflected in the right-of-use assets and lease liabilities.

I will now cover cost management. This is about structural cost removal, not short-term restraint or deferral, supporting operating leverage as the business grows.

Direct telco costs have increased because of the regional mobile network sharing with Optus and the non-lease component of the fiber network access with Vocus. These make up less than 10% of the run rate of our direct telco costs, and they are non-volumetric.

They won't increase as we add customers or data volume. We have operating leverage as we grow, and we avoid OpEx and CapEx over time.

The majority of our direct costs remain NBN costs, which we manage tightly. OpEx is a very positive story, as I have already covered, and we have good momentum to remove $100 million in costs in real terms by FY29.

Inflation has of course been running ahead of the RBA's target of 2% to 3%, if that persists, our OpEx may still go up in nominal terms. Turning to CapEx, the pro forma outcome in additions terms was $771 million, and we expect that to be about $750 million this year.

Our targeted CapEx range remains $550 to $650 million from FY27 onwards, although we expect to be at the upper end of that range in FY27 itself. That's because the IT transformation will be largely complete after this year, but we still have about 1,000 Huawei sites to change out.

Additional mobile network infrastructure sharing would result in even greater CapEx efficiency, benefiting customers across the industry. My next slide covers financing costs, where the change reflects the strengthening of our financial position.

Net bank borrowing costs were down 37.8% in FY25 due to debt repayment and holding cash prior to the capital return, and will be materially lower again in FY26. If you assume a cost of borrowing of 5.5% to 6%, you would forecast FY26 bank financing expense of about $80 million using our net bank debt today as the base.

Also note we are 66% hedged. Financing costs from the handset receivable program were $95 million in FY25 on about $900 million face value sold due to the size of the back-book.

The average of the two quarterly sales since would suggest annual sales of about $600 million face value in FY26, annual financing costs of this program will not be as high in FY26. As noted earlier, this will depend on overall handset trading and supply chain conditions.

On a pro forma basis, lease financing costs would have been $175 million in FY25, and we expect those to be broadly flat year-on-year in FY26. All of the above, of course, is subject to interest rate movements.

Our current expectation is that financing costs will be roughly $100 million lower in FY26 than the FY25 pro forma total of $426 million. My final slide covers our medium-term outlook for cash flow and leverage.

The trajectory was positive in FY25, and we expect momentum to continue to build. The left-hand chart shows our free cash flow to equity, excluding the $4.7 billion in proceeds from the Vocus sale.

We have also shaded out the $594 million benefit from the handsets program, as the back-book sale was non-recurring. After these normalizations and excluding separation costs, the total would have been $396 million, which reflects solid growth on $247 million in FY24.

In FY26, we expect to make up, mostly through EBITDA growth and lower bank borrowing costs, for not having seven months of cash flow from discontinued operations and for having a full year of the new Vocus arrangements. Again, that is excluding separation costs.

We expect FY26 cash CapEx to be broadly the same as FY25. Into FY27 and FY28, earnings growth and lower CapEx should translate to higher cash conversion, and the lower borrowings base has derisked our exposure to interest rates.

We don't believe the ACMA's latest proposals regarding spectrum license renewal payments are a good idea, but even if they remain, we would not expect to have to fund renewals until later in FY27, which is very manageable. Rating agencies understand that the inherently lumpy nature of spectrum funding may cause short-term spikes in leverage.

We have momentum with leverage reduction, dropping below the upper end of our S&P net debt to EBITDA target range of two to three times at the end of last year. We expect to reduce leverage further in coming years.

We plan to derisk our financial position again this year by refinancing the $1.67 billion of bank debt we have maturing in July 2028. Thank you.

I will now hand back to Iñaki.

Thanks, John. This slide sets out the drivers of shareholder value in our business and shows how we are tracking against the key metrics we have committed to grow.

Across these metrics, progress was strong in fiscal year '25, and we are confident of delivering further progress in fiscal years '26 and beyond. Our stronger network and enhanced customer propositions are driving continued mobile service revenue growth.

We expect that to translate to continue operating leverage and higher margins and return on capital as we execute cost discipline and capital efficiency. The outlook for cash flow and dividends is positive.

My final slide covers out our formal guidance for the year. We expect EBITDA to be between $1.665 and $1.735 billion, which is growth of just under 4% on a pro forma basis at the midpoint of $1.7 billion.

We are guiding for CapEx on an additions basis of $750 million, with significant CapEx reductions to come in fiscal year '27 and beyond. Thank you.

We will now take questions.

Thanks, Iñaki. Just a reminder, if you wish to ask a question, please press star one to join the queue, or star two to exit.

Joining Iñaki and John for our questions today are members of the TPG leadership team. Our first question comes from Eric Choi at Barrenjoey.

Go ahead, Eric. Oh,

I had a few questions. Do you want me to ask them all at once, Paul, or just one by one?

Go run through them first, please.

All of them? Okay.

First one is just on FY27 capital management thinking and obviously there's been changes to spectrum and the CapEx outlook since we last spoke. I just wanted to confirm if maybe $600 million of free cash flow or a touch under by FY27 is still a fair estimate.

Obviously you just did under $400 million this year, and you're going to see EBITDA growth and CapEx reduction, so that feels fair. If you did do $600 million, that would put you on an 8% free cash flow yield, and then I'm just wondering how much of that free cash flow yield do you return to shareholders versus how much do you keep in case spectrum needs to be paid in lump sums?

Are you sure you want two and three?

We'll go through that one first.

That

is full of detail.

Eric, why don't I take that one? Firstly, your first question regarding calendar year '27 free cash flow to equity.

I might just start with how we look at '26 free cash flow to equity. If you just take the numbers we've provided,

that does get you to broadly around $400 million. If you take the midpoint of EBITDA guidance at $1.7 billion, you take off cash CapEx and same as '25, let's assume for now working capital is neutral.

Let's also assume cash tax in '26 is similar to '25. Lease costs, of course, will be slightly up because you've got the full 12 months of the TOFA.

We've already commented on how borrowing costs come down. That gets you to around that $400 to $430 million mark.

If you then add to that the reduction in our CapEx, which we've already noted we expect on additions basis to be $650 million in '27, plus you add whatever you assume on mobile services revenue growth and revenue growth overall, you can absolutely get to that sort of $600 million mark that I think you're sort of propagating. That's the first question.

On the second one, we've been really consistent over the last year describing the strengthening of our balance sheet position, including the significant reduction in bank debt. As a result of that and the growth in cash flows that I've just stepped through, we've stated unequivocally we expect to grow profits and cash flow, and with that, we expect to grow the dividend.

That still holds 100%. Noting our strong balance sheet position, and as I noted when we were going through the slides, we're absolutely comfortable in being able to absorb whatever spectrum outcomes will be finalized with the ACMA.

Gotcha. Quick follow-up, and nice jacket, by the way, John, in the prezo.

Not my job to comment on that. Number two, just on mobile subs.

At an aggregate level, that actually accelerated this half versus last half, and when last time you guys gave an update, you told us it would slow down. I'm just wondering if you're seeing the same trend into early CY26, especially on that MVNO result.

We just want to confirm that no one-offs in that MVNO acceleration, and it's literally all on better distribution and organic performance.

Thank you, Eric. I'll take that one.

To your question on MVNO, there hasn't been any one-off, it is all organic growth. Like you pointed, it has to do with improvements on distribution.

The weight of online, I think is also playing well in this segment. We see that brands that are moving more and more activity to online tend to perform better than the ones that are relying a bit more on physical channels.

I think that that has helped the MVNO performance. I think that the performance overall on the second half was good, not just on MVNO, but also our digital-first brands have continued to perform strong.

Looking at the beginning of the year, we think that the trend continues.

Thanks, Iñaki. Just the last one, just on your mobile ARPUs.

If you look at your digital-first ARPU, it was up 11%. My question is, do you have plans or drivers in the next 2 to 3 years to continue to lift that DFS ARPU faster than postpaid?

Because if you combine that with the fact that there's lower cost to serve on DFS, do the economics of DFS and postpaid gradually become more similar?

The idea is twofold. If you look a little bit into felix, which is one of the digital-first brands that we have, on last year, we didn't really do any kind of movement in pricing.

However, we did have a significant increase on the ARPU. That is on the back of customers using the app to get incremental value in plans.

That is a model that works very well. That is a model, like you say, is very low cost.

We think that that is the model that will continue to help improve the overall ARPU of the business. On a year like '25 where we did go for customer growth, and we did get customer growth, we still obtained significant ARPU gains across the brand.

I think that that's something that we'll continue to do, and definitely when you look at the digital brands, which are subscription brands, and some of our competitors will report that under postpaid, it's getting a bit more difficult to really do comparative analysis in the market. This segment is a very interesting segment because it has huge growth.

We still think that the performance of postpaid, when you look at what we report postpaid, which is the premium brand, Vodafone, comparatively again, has done really well on customers and in ARPU. I think that this model of being able to address the different segments through different solutions is really working very well for us.

Thanks, Iñaki. Thanks, Eric.

Our next question comes from Lucy Huang at UBS. You there, Lucy?

Thanks, team. I've got three questions as well.

I might ask them one by one. Just a follow-on from Eric's question on prepaid.

Are you able to talk through churn trends in that part of the business? Because postpaid you've seen some good churn reduction off the MOCN deal, just wondering if you're seeing similar trends coming through on the prepaid side as well.

Thank you, Lucy. Look, the trends on churn are consistent across the brands, also across prepaid and postpaid, and also across consumer and enterprise customers.

On prepaid, we had the benefit of the MOCN and the improved network performance, not just coverage. Also as we are moving more and more commercial activity onto digital channels, that also improves churn.

Traditionally, the physical channels have been higher on churn, we see a prepaid churn also trending in a very favorable way.

Understood. Then just with postpaid mobile ARPU growth, feels like there was probably a slight dilution in relation to the price increases you've put through.

Is there any color whether there's been a little bit of trading down or whether there was a bit of a drag from enterprise coming through mobile postpaid ARPUs?

It is true to say that the mix shift between business and consumer dilutes the overall. That is true, so that practically means that consumer postpaid ARPU improved higher than the average that you saw on our slide.

It's a mix shift overall between segments dilutes slightly. Hope that answers the question.

Oh yes, no that makes sense. Can I just confirm, in terms of mobile postpaid subs, how much is now enterprise?

It feels like that's growing a bit relative to consumer.

Jonathan, maybe you want to take that one? Yeah.

I think, yeah,

Lucy, it was a strong performance. I think two things I'd call out.

One is clearly you saw the benefits of MOCN on churn, and I think we put that number upfront at 12.5%. It's really pleasing performance on churn, and I think net adds has been very strong, surprisingly strong across enterprise, government, and small business.

I think we see the benefits continuing into 2026.

Wonderful. Just my last question on the spectrum.

ACMA's obviously put out their proposals in December. Have you guys come up with an estimate of how much you're aiming to pay?

I think we're thinking $1 to $1.5 billion. Is that roughly kind of the right number over that kind of 3 to 5-year period?

It is more than that, but significantly lower than what we've historically paid, but it's over a longer period of time.

Thank you so much. Thanks.

Thanks, Lucy. Our next question comes from Entcho Raykovski from Evans & Partners.

Thanks, Paul. Morning, everyone.

My first question is just around the recent back-book price increases in postpaid which Iñaki referenced. I wonder if you're able to quantify how much of a contribution you expect those back-book price increases will add to postpaid ARPU growth in FY26.

Thanks for the question, but this is probably a bit premature to say that. Also, I think that we've done on some cohorts of customers, so that does not include all our strategy for the year, it is a bit premature to say anything with that respect.

Are you able to, I suppose, looking at the guidance, and maybe to ask this in a slightly different way, your EBITDA growth guidance, can you talk to some of the broad assumptions which underpin the mobile service revenue growth that you expect, particularly on subs and ARPU?

No doubt the EBITDA growth, as it has been for the last few years is supported by and relies on growth in mobile services revenue growth. Point one.

Point two, we maintain cost discipline, as we've shown over the last couple of years again, and we're very pleased with our outcomes on cost discipline. The combination of those two things largely drive the EBITDA sort of growth implied in the midpoint.

Great. Sounds like you don't really want to go into specific assumptions around subs and ARPU, etc.

No, we've always said that, and you've seen in the material of today, that customers have responded well to our multi-brand strategy and our expanded network. That will continue, and is our plan to continue.

Of course, you've seen as shown, the importance of ARPU growth, and that still remains.

Got it. Thanks, John.

Then my next question, just looking at the postpaid consumer and enterprise churn, as you've been very clear, that's down, but net adds in postpaid were flashy show over the year. I guess I'm just curious whether that reflects a smaller addressable market in postpaid, and what it means about the MNOs' ability to put through price increases in that segment given the growth is coming at the prepaid end of the market.

I guess do you still think there's pricing power within the postpaid market? Thank you.

Thank you, Entcho. Maybe I ask James to answer that one.

In general, I think that we see a market in postpaid that is being again classified as a premium brand. When you look at Telstra, Optus, and Vodafone, we have performed well, but it is a market that has declined in the last year.

Thanks, Iñaki. I think that the thing for us is that we've improved our net adds year-on-year very significantly on the back of MOCN, year-on-year is a 96,000 improvement in our postpaid performance, we've seen a significant turnaround, and we have improved our ARPU at the same time.

The bigger switching pool within the market is still within the tier ones and the branded postpaid businesses, there's opportunity for us to continue to attack that market. The primary market growth opportunity we see is in our digital subscription brand, so that's where we're focused on subscriber growth, as Iñaki and John have talked about.

Maybe if I just add for business, I think don't forget there's 14 million people employed in the economy across part-time and full-time roles. Most of those are what you would consider postpaid opportunities, typically how a company buys, provides a mobile service.

I think a really strong opportunity to grow share in the business segment.

Great, thank you. Just a very final one for me.

You've referenced a highly aggressive NBN market. I'm curious what sort of impact you've seen on the fixed market from the Telstra introduction of the internet-only plans in November.

I don't know if it's too early to comment, and what you expect the impact going to be, firstly on the market, and then secondly on your operations.

Entcho, it's James here again. We haven't seen a material impact from the Telstra changes.

We see that the big drivers in that competitive market is in the players that sometimes sit outside traditional telco category in terms of energy and banking, converged players, but also the likes of Superloop and Aussie, who are growing strongly in that space. Haven't seen an impact from Telstra directly at this point.

Great. Thank you.

Thanks, Entcho. Our next question comes from Bob Chen at J.P.

Morgan.

Thanks, Paul, and hi, team. Couple of questions for me.

Maybe just focusing on that really strong ARPU print in digital-first. Can you talk through sort of the key levers you have to sustain that ARPU growth in that segment?

Thank you, Bob. Look, really the lever is to have a very simple pricing structure or plan structure, also a very simple way for customers to choose between these alternatives.

The outcome that we are getting is that even though a lot of customers come to this brand on lower price points, ultimately through the app and looking at the value that they are getting, they are on their own choosing higher-tier plans, and that is really the key to that ARPU growth.

Right. Okay.

More sort of mixed there. That makes sense.

Then, yep, just given there's a fair bit of noise around what handset volumes might look like this year given increase in prices or shortages of DRAM, how does that play into or potentially impact your mobile business?

Look, I think that that's an uncertainty in the market, and we're monitoring closely. You see how in '25, the overall handset market has gone down, and that probably has to do a bit on the difference performance of premium brands or brands that are attached to handset.

Ultimately, when you look at our premium brand, we still do most of our connections are without handset. It is an area that it may affect the market somehow, but we don't think there is going to be a massive impact at this stage, even though we may see some shortages on some models during the year.

Great. Maybe just a final one on the broadband business.

How should we think about the mix of that business going longer term? Is it more about sort of defending NBN and really just growing that fixed wireless to grow gross margin and defend your share there?

The way we look at that business, for us, that is a very good complementary business to our mobile business. We have invested significantly on the capabilities to really leverage on that opportunity to cross-sell and upsell inside our customer base.

Also when we look at our different brands, brands where we've been better in terms of the cross-selling have performed better than the others, and I think these are capabilities that during this year we are introducing significantly. Then on the profitability side, we continue to look at the profitability of this business.

Fixed wireless is a big part of this, and that's why we are now introducing further innovation with the 5G Standalone capabilities, and that will enhance our overall footprint on fixed wireless. Our aim is to continue working on that.

Then monitoring a bit how the trends on NBN play. I think last year we still were negative, even though we had a much better second half.

Things are getting better on the NBN side, and as I said, with the new capabilities around convergency, we think that that will continue to improve in '26.

Great. Thanks, Iñaki.

Thanks, Bob. Our next question is from Liam Robertson at Jarden.

Thanks, Paul. Morning, guys.

Just first one on me, just around the MOCN revenue payback. I think you've absorbed close to $50 or $60 mil in the first year.

I'm conscious in the accounts, you're calling out more than offsetting revenue benefits in future years. Can you just tell us how you're thinking about the phasing of that net benefit trajectory moving forward?

We're already offsetting it, would be point one. That's important to know.

We just acknowledged in the earlier that the growth ex-MOCN in half two was greater than half one, and that's simply because you incur the cost ahead of the revenue benefits coming. That would be point one.

Point two, and I think we've discussed this on other calls and more broadly, I think depending upon and most analysts have sort of said to break even, you've got to get about 100 to 200,000 net incremental subs, to break even, and break-even is definitely not our aspiration. It's definitely higher than that, and you've seen the subs growth in year one, which was very strong.

Yep, makes sense. Then just secondly on the FY26 EBITDA range, I'm conscious Entcho was trying to dig into some of the moving parts there.

$70 mil range is probably wider than you've historically guided to. Can you maybe just talk to some of the more discretionary components?

For example, I think the advertising and promo spend was up $40 mil in FY25, a lot of that relating to the launch of MOCN. Can you just talk to what's actually in your control?

Ultimately, it all is, but just conscious you're saying too early to talk to some of the ARPU and subs trends. What are some of the key swing factors from the bottom end to the top end of that range?

Thanks.

Firstly, the range is lower than prior period, it is a smaller range. Secondly, we would expect, as I said, mobile services revenue growth through both ARPU and subs to do most of the heavy lifting.

We continue to grow FWA subs base, and that is highly profitable relative to or more profitable than NBN. That would be another factor.

Thirdly, you've seen in our results that we grew handset revenue and slightly grew handset margin year-on-year. Not a big impact, but it's important that you drive handset volume profitably.

Then three, and I think you've seen this now in our track record, but I'm really pleased with the performance that we're delivering on operating costs. We've been really clear on how we see the outlook for that, and that trend continuing.

I think it's really the combination of those things at EBITDA. Below EBITDA, I've already spoken about how bank borrowing costs reduce, etc., etc., that further supports NPAT.

The other thing is that traditionally we've been at the midpoint of this guidance, and then, of course, we look for some risks, but at the same time, we also have visibility of some opportunities, so that's why the guidance has that range.

Right. Thanks, guys.

Thanks, Liam. Our next question comes from Andrew Gillies at Macquarie.

Thanks, guys. Just digging into that OpEx performance, John, if I may.

On the cost out of $100 million and kind of the prior commentary you made around broadly flat sort of operating costs through to '29, there's been a lot of news flow in the market on redundancies from AI, the commentary in the deck kind of excludes that. Would that present further upside to this number?

Are there any things you're looking at that may potentially present sort of further upside to that operating cost flat or even out?

We don't really think about AI like that. We see AI as complementary to our business.

A great example of that might be how we monitor our network at a greater scale, that complements the humans, the people that every day run our network so well. That's how we think about it, and that's sort of our approach to it.

More broadly on OpEx, why have we given that 4-year outlook is one because we're well through our IT modernization and business simplification. We see benefits being driven by that.

We are now a simpler business post the sale to Vocus. We continue to deliver normal productivity, and I'm not referencing AI in that, through our employee base, and we do a really good job of how we approach third-party spend with our partners, and what I mean by that is how we commercially work through rate, manage, demand, and also scope with third-party spend.

It's really the combination of all those factors that has delivered to date that strong performance in OpEx, and will continue to deliver it in the outlook we've given.

Perfect, thank you. Then just one quick follow-up as well.

On sort of Triple Zero outages post that sort of event in the market, lowest plan prices among MVNOs are increasing. Appreciate you probably won't talk to wholesale agreements, but how's your competitive position sort of in the MVNO space at the moment?

Maybe you take that, Jonathan.

Yeah. The competitive position on MVNO and the comparison to wholesale, probably the way we think of it is it accesses a portion of the market that we wouldn't reach directly through our own brands.

Two things to consider: one, some of the brands we work with were already in market with competitive carriers, they're now on the Vodafone network, which is great for us; and then, secondly, they typically access either different segments of the market or different distribution routes that wouldn't naturally be in our portfolio. I think we view it as complementary, and we view it as a clear growth opportunity.

Thank you.

Thanks, Andrew. Our next question comes from Nick Harris at Morgans.

Thanks, guys. I think like everyone, I'm just trying to unpack the mobile momentum.

There's obviously a lot of opacity there, but it was a great result, and obviously a stronger result in the second half than the first. You've got lower churn, coverage expansion, digital brands accelerating, and obviously some extra own goals from one of your competitors.

Can you just help us unpack roughly where the bulk of the subscriber growth is coming from, specifically, are you seeing metro market share expansion for customers staying in metro, or are you seeing some really healthy expansion as a result of MOCN and those regional coverage gains, which was obviously what you're talking about? I appreciate you've given us some of the cost of back-solved, but just from your perspective, that would be helpful.

Thank you.

Thank you, Nick. Look, I think, first to talk about the effect on MOCN in terms of the market growth by region, this has been something that we've been following really closely.

What I can tell you is that the growth has been across metro and region. In metro, our best performers have been Melbourne, Perth, and Brisbane, and that is also related to the fact that in the past, we probably had a lower market share than what we had in other metro areas, those have performed really well.

Then when you look into more regional towns, and we've been following that also very closely, there's been growth across the board on every single one of them. There are some like Hobart or Sunshine Coast that have been a bit outliers, but in general, what we see is the growth volume base has been greater in metro, in terms of percentage related to our existing customer base there has been much greater in regional.

Good performance across the board.

Thank you, Iñaki. Sorry, just to make sure I heard that correctly, you said greater volume growth in regionals, but strong growth in metros as well, yeah?

In terms of customer numbers, there's 6 million people living in Melbourne, if you get any incremental there, is a lot of customers, but then percentage-wise, those more regional centers where our market share was sometimes single digit or low teens, is where we've seen a percentually a bigger increase.

Thank you very much.

Thanks, Nick. Our next question comes from Roger Samuel at Jefferies.

Oh, hi. Morning, all.

I've got a couple of questions, but firstly, can I just double-check on my calculation for your net financing cost going into FY26? If your bank interest is going down to $80 million, your lease cost is roughly the same, $175 million, and the handset receivables financing is about $95 million, I'll get to a total of $350 million.

Is that roughly the right number?

Our reported disclose was, I think, $393 million. What we've said is bank interest goes through about $160 to $80 million.

This is on a reported basis, Roger. Lease interest will go up because you've got the full 12 months, and we've said handset financing costs will come down simply because the size of the forward book will be lower than the back-book sold in '25.

That gets you, the sum of those maths, and I appreciate it's busy below the EBITDA line, gets you to about an $80 $80 million reduction on a reported basis. On a pro forma basis, it's obviously higher than that.

It's about $100 million.

Yep. Okay.

Does that

does that make it

is that helpful?

Yep. Yep, that's helpful.

Thank you. Then secondly, just on fixed broadband, looks like the decline in NBN subscribers has moderated in the second half.

You also sold the EGW business to Vocus as well. How much of that customer actually moved across to Vocus as part of that transaction?

We saw a lot of customers move, but in the half, there was another 9,000 that moved.

Yeah.

Obviously, the transaction completed with a whole bunch of customers moving much larger than the 9,000. When you look at the half one versus half two, in half two, there was a transfer of about 9,000.

You're right, we materially reduced and improved our performance in half two on NBN than half one.

Yep. Okay.

Just lastly on your KPIs, you made good progress in there. Just wondering, with the number of IT applications down to 485 versus 470, what's the reason behind that?

Just wondering, maybe with AI, you could accelerate the reduction in the number of IT applications going forward?

Thanks, Roger. Giovanni.

You can appreciate the fact that also our IT transformation had to pivot. The plan that was initially designed was not considering the Vocus transaction, and suddenly we had in 2025 to pivot it and definitely go for a huge separation.

In some way, now the number of systems is also counting some duplications because we had to clone few systems in order to separate the business. This will be normalized across 2026.

I would say it's a small deviation from the plan, but in the long term, the plan is absolutely the same. I would not be worried about that.

Got it. Thank you.

Thanks, Roger. Our final question, at the moment, comes from Nick Basile from CLSA.

Just a reminder, if you do have a question, to press star one. Go ahead, please, Nick.

Thanks, Paul. Morning, team.

I've just got a couple of questions. The first one on the mobile business, I think Iñaki talked about the strong overall subscriber net adds, and you talked about, I guess, the improving postpaid churn.

Just interested, I guess, in the context of the increase in marketing spend, how we think about sort of the phasing of benefits or any updates of sorts on the phasing of benefits from network sharing and the outlook for churn over the next few years. I'll ask my second question, I guess, later.

Thank you, Nick. First in terms of our marketing spend this year, is been good, in the sense of being able to had a good return on that expenditure.

It was also an incremental expenditure that we did virtually maintaining a flat OpEx, I think that that's also part of our discipline. In terms of the churn improvements, we don't really associate churn improvements to marketing spend, that has a lot more to do with the quality of the service and more specifically with the quality of the network.

For that reason, we are optimistic around our churn trends, and we are also optimistic around the quality of our marketing spend as well.

That's fair. The second question, somewhat of a follow-up to Andrew's on AI, just kind of interested to take that from a different angle.

Can you talk to any ways you might be benefiting now or able to benefit on the revenue side or customer experience, onboarding, etc., and specifically, I guess, given you've kind of called it out the digital strategy? Just trying to sort of think about how AI might be of a benefit going forward versus what you sort of done today.

Thanks.

Thank you, Nick. Look, I think we will probably discuss more around AI on a different occasion when we do an Investor Day, but I think that to give you a little bit where we are, we look at AI in three phases.

One of them is around building capabilities, a lot of the systems simplification and upgrades, also the investment we've done on structuring our data model are basic pillars for AI, so that's something that has been a big part of our transformation program, as well as building capabilities on the people in the company around AI. The things that we are working like we said before are twofold.

One of them is around network automation, operations, but also the way to we are able to monitor in a much more individual way the performance of our network per customer is something that we are investing and working on, and this is something that we think AI will bring greater benefits. The other part where we are also working is around improving our customer experience, and that goes things that have to do with just a better way to handle the calls, better way to serve the customers, better way to assist our call center agents on the way that we do that to reduce the times that customers have to call us, to be able to be better in detecting challenges on our service and being able to provide a better service.

That's also something that is work in progress. We are investing on that, and we are also quite optimistic around where that goes.

Probably the part that you were mentioning, which is more around the revenues, I do think that the industry will play a significant role in enabling AI to our customers, but that's probably more of a third phase of our AI strategy.

Great. Thanks very much.

Thanks, Nick. We have a follow-up call from Entcho at Evans & Partners.

Thanks, Paul, and thanks for taking my follow-up. Just this will hopefully be a quick one, but it's on ROIC and how it can be driven over time by growing pricing or ARPU.

I'm conscious that pro forma ROIC was 5.4% in FY25. Correct me if I'm wrong, but you should see an incremental 70 basis point increase into '26 from the handset refi restructure, which gets you to just over 6%.

I suppose then the question is where do you see ROIC going longer term? I think John referenced some growth over time.

Then within that growth, how important is ARPU growth in mobile for that ROIC improvement? Do you expect that will be the key plank, or do you see other elements like subs growth and perhaps cost reductions as being more important?

Firstly, the way you've described the impact of ROIC year-on-year from the handset receivables sale program is correct, simply because you get the full annualized benefit in 2026, in the denominator of ROIC, which I think is what you were referring to. I agree with that point.

Look, there's a thin line between the numerator and the denominator of ROIC. The numerator is reliant on growth in service revenue, driven by both ARPU and subscribers, and I think we've been demonstrating that well over the last few years in our track record there.

It also relies on the continued discipline, and against on our operating costs, which our track record, I think, is very strong. It also relies on continuing to manage fixed profitability overall across all our fixed products.

Then on the denominator of ROIC, continue that capital efficiency. CapEx is coming down.

We've made clear reference to that today in our outlook. It's really those factors that drive our outlook for ROIC and why we are confident we'll continue to grow.

You don't have a longer-term target you can share with us?

Look, we want to continue to grow ROIC above WACC. That's definitely our base case, as we think about it.

That's just good economic practice, and you can see the trend on that is very strong. Then, of course, we want to grow above that.

Got it. Thanks, John.

Thanks, Entcho. We have another follow-up question from Liam at Jarden.

Go ahead, Liam.

Thanks, Paul. Sorry, guys, just really quickly on mobile ARPU.

I'm just conscious at the first half, you made a comment around pricing being aligned across front-book and back-book following the pricing refreshes. We would have seen that flow through in the second half.

Just conscious and John, to your comments on ARPU growth, am I right in thinking that that will have to be predicated on front-book price increases moving forward? Thanks.

I'm not going to make any comment on future price plan refreshes. We just won't do that.

Just if you can confirm that pricing across the front-book and back-book are now more broadly aligned?

Over the last couple of years, given our actions, that is true. Absolutely true.

Thanks.

Thanks, Liam. We have no more calls at the moment, so that will conclude the call for today.

Thank you very much for joining. Speak to you soon.