Aussie Broadband (ASX: ABB) has announced the Aussie Broadband AGL Telco acquisition, signing an agreement to acquire AGL Energy’s telecommunications business for $115 million in shares. The deal adds approximately 350,000 broadband and mobile connections to Aussie Broadband’s customer base and establishes a long-term exclusive partnership between the two companies.
Aussie Broadband secures AGL Telco acquisition in $115 million deal
The Aussie Broadband AGL Telco acquisition comprises approximately 218,000 NBN services, 144,000 mobile connections, and 46,000 voice services as at 31 December 2025. Transaction completion is expected in June 2026, with customer migration to commence in Q1 FY27 (July to September 2026) and expected to be complete by H1 FY27.
Under the agreement, Aussie Broadband will issue approximately 22 million shares to AGL, representing around 7.5% of the company’s current issued capital. This makes AGL a substantial shareholder and aligns the energy retailer’s interests with Aussie Broadband’s telecommunications growth strategy. The all-scrip consideration is based on the 90-day volume-weighted average price to 9 February 2026.
The transaction is not simply an asset purchase. AGL will continue to market telecommunications products under its brand, whilst Aussie Broadband operates the network infrastructure and manages customer service delivery. This white-label partnership model provides Aussie Broadband with access to AGL’s 4.5 million energy customer base without requiring direct sales infrastructure.
Additional ABB shares worth up to $10 million will be issued to AGL in $2 million tranches, subject to meeting specified net connection growth targets over time. These performance hurdles tie AGL’s ongoing equity participation directly to the success of the partnership in expanding telecommunications services to its energy customer base.
What is a white-label telco partnership?
A white-label telecommunications partnership allows one company to rebrand and sell another company’s network services under its own name. In this structure, AGL maintains its customer-facing brand and marketing channels, whilst Aussie Broadband provides the underlying network infrastructure, technical operations, and customer support.
Energy retailers commonly bundle telecommunications services with electricity and gas products to improve customer retention and increase revenue per household. For AGL, offering broadband and mobile services alongside energy creates a “sticky” multi-product relationship that reduces customer churn. For customers, the convenience of consolidated billing and bundled pricing provides an incentive to purchase multiple services from a single provider.
This arrangement allows Aussie Broadband to access AGL’s substantial residential customer base of 4.5 million energy services without building its own energy retail capability or investing in brand-building campaigns. The partnership effectively converts AGL’s existing customer relationships into a distribution channel for Aussie Broadband’s telecommunications products, significantly reducing customer acquisition costs compared to traditional marketing approaches.
Financial impact and earnings outlook
The Aussie Broadband AGL Telco acquisition is expected to deliver estimated revenue of approximately $235 million and underlying EBITDA of approximately $21 million in the 12 months following migration completion. Management expects the transaction to be EPS accretive in the first full year after customers transfer to Aussie Broadband’s network infrastructure.
| Metric | Estimated Value |
|---|---|
| Annual Revenue (post-migration) | ~$235 million |
| Underlying EBITDA (post-migration) | ~$21 million |
| Target EBITDA margin | 12.5%+ |
| Five-year connection target | 500,000+ |
These financial projections are based on 350,000 connections at the completion of migration and exclude one-off costs associated with the transaction, migration activities, and contract incentive amortisation. Aussie Broadband expects to generate EBITDA margins for AGL Telco in accordance with its Look-to-28 strategic plan target of at least 12.5%.
The company aims to grow AGL Telco connections (excluding voice services) to more than 500,000 over five years. Net growth in connections, combined with scale benefits and efficiency gains from network synergies, is expected to deliver significant upside to earnings over time as the partnership matures beyond the initial migration period.
Transaction structure and share issuance
The $115 million upfront consideration will be paid entirely in ABB shares rather than cash, preserving Aussie Broadband’s balance sheet capacity for operational requirements and future growth initiatives. The Share Subscription Agreement includes standstill provisions and disposal restrictions on AGL’s shareholding, subject to limited carve-outs, providing stability to Aussie Broadband’s register.
Control transaction voting restrictions apply to AGL’s shareholding to protect existing shareholders from potential changes in company strategy. The performance-linked share incentives, worth up to $10 million in additional tranches of $2 million each, directly align AGL’s interests with achieving net connection growth targets outlined in the partnership agreement.
The shares will be issued within Aussie Broadband’s 15% placement capacity as permitted under ASX Listing Rule 7.1, meaning no shareholder approval is required for the transaction to proceed. This structure allows the companies to complete the deal efficiently without convening a general meeting or seeking institutional support.
Strategic rationale and market positioning
Following the migration of both AGL Telco and More/Tangerine services to Aussie Broadband’s network, the company is expected to become Australia’s third-largest NBN service provider. Broadband connections are expected to exceed 1.25 million, with the company servicing almost 400,000 mobile connections across its operating segments.
The More/Tangerine acquisition, announced on 25 August 2025, will see approximately 290,000 NBN connections migrate to Aussie Broadband in the current financial year (FY26). Combined with the AGL Telco transaction, FY27 represents a transformational period for the business as it integrates significant customer volumes and establishes itself firmly among Australia’s telecommunications market leaders.
Brian Maher, Aussie Broadband Group CEO
“We are delighted to have secured this strategically significant transaction with AGL which will see Aussie Broadband further cement its position as a leading provider of fast and reliable NBN services in Australia. To be chosen by one of the largest and most trusted energy providers in Australia as their partner in connectivity is a further testament to the outstanding quality and reliability of our network and the service we provide to our partners and customers.”
Scale delivers material competitive advantages in telecommunications markets. Larger customer bases improve wholesale negotiating positions with NBN Co and mobile network operators, reducing per-unit costs. Network infrastructure investments are spread across more connections, improving return on capital. Customer acquisition costs decline when growth comes through partnership channels rather than traditional marketing spending.
The partnership provides Aussie Broadband with multiple growth channels simultaneously. Organic growth through direct sales continues alongside access to AGL’s substantial energy customer base. Cross-selling telecommunications to existing energy customers typically achieves higher conversion rates and lower acquisition costs than cold-market prospecting, potentially accelerating connection growth beyond management’s stated five-year target.
Partnership exclusivity and termination provisions
Under the partnership terms, Aussie Broadband has agreed to exclusivity obligations relating to the promotion and sale of energy products to AGL. Reciprocally, AGL has agreed to exclusivity obligations for its promotion and sale of telecommunications services. These mutual commitments prevent either party from establishing competing partnerships that would undermine the strategic value of the arrangement.
The partnership has no fixed term but includes termination rights for both parties under specific circumstances. Either party may terminate in the event of insolvency, material breach, or material damage to reputation or goodwill. AGL holds additional termination rights for repeated material performance target failures by Aussie Broadband and certain change of control events affecting the telecommunications company.
AGL retains the right to buy back the AGL-branded telecommunications customer contracts at commercial value if either party terminates the collaboration agreement. This provision protects AGL’s brand relationship with its customer base whilst providing Aussie Broadband with clear commercial incentives to maintain service quality standards throughout the partnership duration.
The Asset Sale Agreement includes customary provisions including warranties and limited termination rights for material adverse change events. These standard commercial protections allow both parties to exit the transaction prior to completion if circumstances materially change between signing and the expected June 2026 completion date.
Timeline and next steps
The Aussie Broadband AGL Telco acquisition follows a clear implementation sequence over the next 18 months:
- Transaction completion expected June 2026
- Customer migration to commence Q1 FY27 (July to September 2026)
- Migration expected complete by H1 FY27 (December 2026)
- First full year of financial contribution from H2 FY27
- Half-year results release later in February 2026 for further performance update
Customer migration during H1 FY27 represents the critical operational phase of the transaction. Following migration, AGL will continue marketing AGL Telco-branded products via existing channels, supported by bundled product offerings and marketing efforts in accordance with agreed service standards. Customer contracts transfer to Aussie Broadband, with service provision and customer experience for telecommunications services solely managed and operated by the telecommunications company.
Investors can track migration milestones against management’s stated targets throughout FY27. The company has committed to providing a performance update when it releases half-year results later in February 2026, offering additional detail on current trading conditions and integration planning ahead of the June 2026 completion date.
FY27 emerges as the inflection year for Aussie Broadband’s growth trajectory. The combination of AGL Telco’s 350,000 connections and More/Tangerine’s 290,000 NBN services represents a near-doubling of the company’s customer base within a 12-month period, positioning it among Australia’s largest telecommunications providers with enhanced scale economics and market influence.
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