Although ABB’s H1 FY26 was a mixed bag in February, covered here, the underlying growth narrative remains in play. Aussie Broadband’s core business remains the resale of NBN services, with management targeting further market share gains and an ambition to become Australia’s third-largest NBN provider by the end of 2026. ABB grew NBN market share by 20 basis points in Q1 FY26, adding around 16,000 subscribers, while strategically holding headline prices flat to protect volume.
Unlike Telstra, Optus and TPG, Aussie Broadband lacks the diversification benefits of a large mobile business and owns little underlying network infrastructure, leaving it more exposed to any disruption in fixed broadband. As a result, Starlink’s growing presence in regional Australia has become an increasingly important consideration for investors.
However, to its credit, management is not standing still, actively expanding into enterprise, business and wholesale services to reduce reliance on residential NBN customers. The NexGen acquisition strengthens its enterprise and cloud capabilities, while ongoing market share gains demonstrate solid execution. However, with ambitious growth targets and relatively thin margins, we will be watching closely to see whether ABB can diversify its earnings base quickly enough to stay ahead of a rapidly evolving competitive landscape.
- We continue to like ABB but will watch the impact of Starlink closely in the coming months – MM owns ABB in the Emerging Companies Portfolio.
MM is long and bullish towards ABB
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