Aussie Broadband (ASX:ABB): A likeable telco that can reach for the skies again

Aussie Broadband (ASX:ABB) is a good illustration of a Telco stock you can like (as opposed to Telstra). Since listing on the ASX in 2020 at a market cap of under $200m, it has substantially grown its customer base, revenues and, consequently, its valuation which was $1.5bn as of early January 2026. 

2025 was another year of growth for the newly-minted ASX 200 company with shares finishing the year over 40% higher than where they began. Nonetheless, shares fell over the last 2 months of the year and there are some reasons why, including the ACCC’s proposed changes to regulated rates for voice interconnection services in Australia. But do these changes make that much of a difference?

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Who is Aussie Broadband?

Aussie Broadband is one of several NBN providers in Australia and prides itself in its high internet speeds and customer service experience. It was formed in 2008 through the merger of two regional telcos – Wideband Networks and Westvic Broadband. Retail telco is a notoriously low-margin business, especially if it’s the NBN – even the major telcos hate it. It is also a thankless industry to be in with customers expecting perfect service, given how much we rely on the Internet.

Aussie Broadband is able to make money through automation systems that lower the cost, but also provide a smooth customer experience, enabling sign-ups that can be done without any on-site work. The company’s app, used by nearly 80% of its customers, allows certain issues to be self-resolved and customers to monitor their usage.

As for customer service, ABB is highly rated by customers for its sign-up experience, its products, internet speed and for having a local call centre with low wait times. It has consistently been the most trusted telcos in various surveys (such as Roy Morgan). The company also has an enterprise business and has customers including Starbucks, Cricket America, Queensland Police, WesTrac, Roll’d, Maurice Blackburn and the Reject Shop. 

Strong growth since listing

Aussie Broadband has had constant growth in all its customer segments (not to mention its top and bottom lines), year-on-year, quarter-on-quarter. In FY25, the company made $1.2bn revenue, up 19%, off the back of 788,400 connections – a figure up by over 100,000 in 12 months and representing 15% growth as well as an 8.4% NBN market share. The company recorded $138.2m EBITDA, up 14.7% and at the top end of its upgraded guidance, not to mention a $32.8m profit which was up $32.8m. A dividend of 6.4c per share was paid, including a special dividend of 2.4c per share.

Since listing, Aussie Broadband has rolled out new products, including mobile plans and white label, rolled out its fibre optic network and acquired telco solutions providers Over the Wire and Symbio. Symbio made a $39.4m contribution to the group EBITDA and $6m in operational synergies. The company recently launched Buddy Telco, an alternative NBN provider that aims to provide lower cost through an entirely self-service model. There is a target of 100,000 customers for Buddy within 3 years.  

For FY26, the company has provided guidance of an underlying EBITDA range of approximately $157 million to $167 million, implying growth of about 14 % to 21 % compared to FY25.

An record not perfect

Things haven’t been as smooth as the company’s growth suggests. In May 2022, Aussie Broadband put out a quarterly trading update that spooked investors, who sent shares down 60% in the following 6 months. Although it reiterated its EBITDA guidance, it was towards the lower end of the original guidance – Aussie Broadband provided $27-$30m for the full year just 3 months earlier.

When a company has an unblemished record that suddenly becomes blemished, this can have a significant impact – shareholders can realised negative aspects a company that they may have previously disregarded. Eventually the company recovered but it took a few months, although the directors that bought shares at the bottom would have done well. 

For Aussie Broadband, the most peculiar trait investors need to know is that it targets the low-margin retail telco segment. In contrast, market darling Uniti had traditionally been wholesale only as well as an alternative network to the NBN rather than just another provider. We also observe that while the company is NPAT profitable, it has been (and admittedly still is) low margin, at just 2.6% in FY23 and FY24, followed by 2.8% in FY25. 

For several months in 2024, Aussie Broadband tried to buy Bevan Slattery-founded Superloop (ASX:SLC). Even though the companies acknowledged it would make strategic sense, the $466m takeover bid (offered in shares) was rejected. Aussie Broadband had accumulated a 19.9% stake in the company, indicating its intentions, but was not only rebuffed by Superloop, but ordered to sell its shares in the company to below 12%. It would ultimately sell all of its shares.

ABB’s founder Phillip Britt retired as MD in February 2025 to focus on a community-focused venture in the Gippsland region. He remained on the board, but has sold some of his shares to fund the venture. Britt was replaced by former CFO Brian Maher.

An ACCC headwind?

Over the following 18 months, things improved off the back of ABB’s financial results for FY23, FY24 and 1H25. But things haven’t been entirely smooth.

One possible headwind came just before Christmas when the ACCC released its final report on changes to the regulated rates for voice interconnection services. A new fare schedule will be rolled out over the next few years, impacting Symbio and NetSIP, and thus the group. The current rate for mobile terminating access services is A$1.19 per minute but will be reduced to $0.93 per minute from July 1, 2026. For fixed terminating and originating access services, it is A$0.86 per minute now but will be gradually reduced to A$0.26 up until July 2029.

This will have no impact on FY26, although ABB has told investors to brace for a $3m EBITDA impact in FY27 and a $6m hit in FY28, although the latter is less than 2% of the FY26 EBITDA range.

Why we think there’s share price growth left in it

In the current environment where consumers are strapped for cash, the companies that will perform the best are those that consumers find the best value for money. First, a segment they can’t cut back their spending on (without compromising their way of life too substantially) and second, where the company offers the best value for money. Consider Baby Bunting (ASX:BBN) as a case in point – cash-strapped parents dumped buying baby clothes enmasse as they realised could get the same product from Big W for a far lower price.

Aussie Broadband is in a different basket, however. Its broadband is similarly priced to competitors, but customers get a lot more bang for their buck than with competing telcos. We admire its growth record since its founding and listing as well as its high reputation in the industry.

The 12 analysts covering the company agree. For FY26, consensus estimates call for $1.3bn revenue, $162m EBITDA and a $52.6m profit. For FY27, $1.47bn revenue, $194.4m EBITDA and a $70.2m profit. In FY28, $1.59bn revenue, $214.3m EBITDA and an $87.7m profit.

Although the company has not given specific goals for those years, these are the company’s goals for the end of FY28 (3 years from now). The company reckons it can succeed through positioning as a premium provider, providing high speeds. With average downloads on the NBN expected to double by 2029 and uploads to quadruple by 2032…customers are demanding, but could be easy to satisfy if only it delivers.

Keep your eye on Aussie Broadband

Clearly, whether or not you invest in this company all comes down to whether or not you believe it can continue its high top line growth while gradually growing its bottom line. We think it can, given the recent acquisitions, its reputation in the industry and the long-term, no ‘BS’ attitude of the company’s management.