Swoop’s Lower-Margin Flip Deal Tests Profitability Amid Growth Push

Strategic Partnership in Australian Telecom

Swoop Holdings Limited (ASX: SWP) has announced a significant new wholesale internet services agreement with Flip TV Pty Ltd, an Australian-owned telecommunications provider known for its award-winning broadband and mobile offerings. The three-year deal will see Flip’s growing broadband customer base, currently at 26,000 accounts, migrate onto Swoop’s network infrastructure.

This partnership is expected to generate over $10 million in annual revenue for Swoop starting January 2025, with further upside potential as Flip continues to expand its customer footprint. The agreement represents a meaningful revenue stream for Swoop, contributing to its ambition to become Australia’s leading challenger internet and telecommunications provider.

Balancing Growth and Margin Dynamics

While the wholesale services provided under this contract are lower margin compared to Swoop’s direct-to-consumer business, the company emphasises that the deal is materially profitable and cash flow positive. CEO Alex West highlighted the operational commitment demonstrated by both teams, who worked through the traditionally challenging holiday period to ensure a smooth migration of Flip’s customers.

Flip’s Managing Director, Steve Kotzo, praised the partnership as a strategic enabler that aligns with Flip’s core principles of product quality, service excellence, and competitive pricing. He expressed confidence that the collaboration will enhance customer experience and support Flip’s ambitious growth targets.

Market Implications and Future Outlook

The agreement underscores Swoop’s growing role as a wholesale infrastructure provider in the Australian telecommunications market, leveraging its fibre and fixed wireless network capabilities. For Flip, the deal provides scalable network support critical to sustaining its rapid customer acquisition and service delivery ambitions.

Investors should note the customary contractual protections included, such as warranties, indemnities, and termination rights, which mitigate risk for both parties. However, the ultimate revenue growth from this partnership will depend on Flip’s ability to continue expanding its broadband customer base in a competitive market environment.

As Swoop integrates Flip’s accounts and supports their growth trajectory, the deal could serve as a blueprint for future wholesale partnerships, potentially accelerating Swoop’s scale and market presence.