TPG Telecom (ASX:TPG) said that S&P Global Ratings revised its outlook on the company to stable from negative and affirmed its "BBB" long-term credit rating, citing improving earnings, a stronger balance sheet and a capital-light business model, according to an Australian bourse filing on Monday after market hours.

The agency expects adjusted debt-to-earnings before interest, taxes, depreciation, and amortization (EBITDA) to edge up to around 2.8 times in fiscal 2026 before declining to around 2.5 times from fiscal 2027, driven by mobile subscriber growth, cost controls and lower capital expenditure, per the filing.

The company's 2025 Vocus transaction and other initiatives cut bank debt by around AU$2.7 billion, while its Optus network-sharing agreement improved mobile coverage and competitiveness, although spectrum renewal costs, competitive pressures and infrastructure-sharing commitments remain key risks, the filing said.

S&P warned that a sustained debt-to-EBITDA ratio above 2.75 times could put downward pressure on the rating, while an upgrade would require the ratio to remain below 2 times, supported by continued business strength and a more conservative financial policy, the filing added.