Major shareholder and chief executive David Teoh has lost hundreds of millions of dollars on paper. The value of Mr Teoh's 34.4 per cent stake has dropped by about $600 million in a few hours. Washington H Soul Pattinson [WHSP], which owns 25 per cent, has seen the value of its shares drop from $2.5 billion to $2 billion.

After reporting underlying earnings of $775 million, TPG management said it expected to earn up to $830 million in 2016-17. But its shares fell 19 per cent to $9.58, its lowest price since January.

A major problem for future earnings was the higher cost of accessing and servicing customers on the NBN, according to New Street Research telco analyst Ian Martin.

"The margin they make on consumers is largely the result of a $15 copper access price and  over the next three years most of that business will migrate to the NBN, where they pay a $43 access price," he said.

"A large part of the margin and the cash flow that drive TPG's consumer business is going to move from TPG to NBN in coming years."

TPG currently earns a 40 per cent margin from customers, or 24 per cent from subscribers to iiNet, which it bought last year.

Despite the share price drop, some analysts said they believed management's outlook was too pessimistic and the stock was undervalued.

"We have a 'buy' rating on TPG and a $14.50 target price. Despite issuing 2016-17 estimate guidance lower than consensus, we see sustainable EBITDA growth driven by iiNet synergies and growth in corporate, which should more than offset the impact of NBN," Citi analyst David Kaynes said in a note to clients.

WHSP chairman Robert Millner said he thought it was an "excellent result" and had not sold any of his shares.

TPG plans to spend $343 million on capital expenditure, including $73 million on spectrum, $110 million on international under-sea cable capacity, and building its own fibre network in Australia. The telco has applied to buy mobile spectrum in Singapore.

It took in $2.4 billion of revenue in 2015-16, an 88 per cent increase on the previous year. Net profits were $380 million, up from $224 million, and earnings per share were up 61 per cent at 45.3¢ a share. About $93 million of revenue came from selling investments in other telcos.

Most of the growth in profits is thanks to its $1.56 billion purchase of former competitor iiNet, which contributed nearly $250 million to TPG's pre-tax earnings. TPG acquired nearly 1 million broadband customers and about 170,000 mobile customers in the deal.

iiNet customers fell from 989,000 at June 2015 to 983,00 in June this year due to uncompetitive products. But the telco had since improved its products and had seen customer numbers growing since August, according to chief operating officer Craig Levy.

He said there would be "NBN headwinds" in coming years.

"As we move into the NBN world, we are challenged with an increased propensity for our customers to consume data, and we face this very, extremely expensive [capacity] charge, which at the moment is just below $16 per megabit per second," he said.

Mr Levy said this price was more expensive than sending a megabit internationally. TPG would focus on getting customers to use its own inner-city fibre to the basement network, where it could maintain higher profit margins.

A $20 million drop in profits from mobile customers is due to TPG offering two months of free service to make up for the inconvenience customers went through when TPG switched mobile wholesalers. Customers had to install a new SIM card into their phone after TPG decided to buy mobile services from Vodafone instead of Optus.

TPG declared a dividend of 7.5¢ a share payable on November 22, giving shareholders a total dividend of 14.5¢ for the year, compared with 11.5¢ the year before.

It has a $1.6 billion debt facility, with about $303 million unused.