Is the telecom sector bouncing back? TLS, TPG, ABB in focus

3 min read | June 22, 2022 10:51 AM AEST | By Sukriti Nair

Is the telecom sector bouncing back? TLS, TPG, ABB in focus — Image source: Artinspiring | Megapixl.com

Highlights

Australian shares have bounced back from its losing streak yesterday (21 June).

Most sectors on the ASX200 index are in green including the telecom sector under 5G transition.

Telecom sector is up about 0.50% at 10:12 AM AEST.

The S&P/ASX200 is up today, gaining 29.20 points or 0.45% to 6,553.00. Sectors are mixed. 6 of 11 sectors are lower over the last week along with the S&P/ASX 200 Index. Although little changed, Consumer Staples is today's best performing sector. It is up 0.76% for the past five days.

Telecom sector is up about 0.50% at 10:12 AM AEST. Telecommunication stocks representative ASX 200 communication services sector index XTJ is at 1344.200.

Telecom sector is ongoing a transition from fixed line services to 5G based networks. Key players are consolidating businesses to share transition costs and expand reach. In this backdrop, let us look at how telecom stocks - Telstra Corporation Limited (ASX:TLS), TPG Telecom Limited (ASX:TPG) and Aussie Broadband Limited (ASX:ABB) share prices are moving recently.

Telstra Corporation Limited (ASX:TLS)

Australia’s biggest telecom services company, Telstra Corporation Limited’s share price has been bouncing back from its monthly lows recently.

TLS share price has gained 5.79% in last one year as of 22 June 2022, 10:15 AM AEST.

As of date TLS share price trades on a PE ratio of 30.96, with a market cap of AU$44.13 billion and an annual dividend yield of 4.18%

TPG Telecom Limited (ASX:TPG)

Another telecom stock to look at now is TPG Telecom Limited. TPG has been in news in the recent past for its network sharing agreement with Telstra. Under the deal, Telstra will be sharing its Radio Access Network (RAN) for 4G and 5G services. TPG Telecom was to receive access to roughly 3,700 Telstra mobile network assets. However, TPG share price has remained volatile over the last six months.

Another reason behind the TPG share price fluctuation could be the anticipated sale of earlier escrowed shares by major shareholder Vodafone Hutchison. Media reports suggest that though shares held by Vodafone Hutchinson were escrowed under a scheme implementation arrangement, they will be available for sale post 13 July. Any major stakeholder’s share dilution often causes such reactions.

However, today following along the sectoral trend TPG share price has gained about 0.519% at the market open.

Aussie Broadband Limited (ASX:ABB)

Gaining almost 4% in the opening hours today, shares of Aussie Broadband Limited have bounced back from their three-month low level. While over the last six months ABB share is down about 30%, it appears to be reversing losses from yesterday.

Lacking any major releases on the exchange today, ABB also seems to be influenced by the positive investor sentiments on telecom sector.

Aussie Broadband Limited’s mobile segment business has also grown, gaining 62% y-o-y. Earlier this year, Aussie Broadband had also acquired the diversified telecom business- Over The Wire. Business growth thus appears as an important influencer on Aussie Broadband share price.

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