Courage!" he said, and pointed toward the land,
"This mounting wave will roll us shoreward soon."
This first line dumps us right into the middle of things. We don't get any preparation here—Tennyson doesn't set the scene or introduce the characters. Someone is just suddenly talking, and telling someone else to have "Courage!"
More specifically, the speaker lets us know that this guy is pointing at the land. Then the speaker promises that the wave that's rising ("mounting") is going to push them toward the shore soon. So we can guess that this speaker, and the person (people?) he's talking to are on or in the water (maybe swimming, maybe in a boat) and that they hope to get to the land… somehow.
Starting right in the middle of things is what's known in the biz as in medias res, and it makes for an exciting opening (sort of like the first scene of Saving Private Ryan, for example). All of a sudden we're just thrown into the action.
One other note here: check out all the S sounds going on in "us shoreward soon." That's some consonance for you, and we're going to bet that there's a ton more where that came from. (Check out "Sound Check" for a run-down.)