Two ASX telecom stocks that made a robust start to April 2021 – FSG, TPC

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  • The telecom sector acts as a backbone for many industries, connecting people, businesses, and households.
  • The Australian telecom sector reported a strong 52% growth in 2020, with experts believing fixed broadband and mobile subscriptions will continue to grow during 2020-2025.
  • Field Solutions Holdings has signed an MVNO deal with Optus to provide 4G and 5G voice and data services.
  • TPC's 100%-owned subsidiary CovaU Pty Limited signed its first power purchase agreement with White Rock Solar Farm Pty Ltd.

The telecom sector plays a crucial role and is an essential infrastructure service for economics. Australia has a mature yet highly competitive telecommunication sector. According to a research report, Australian mobile subscriptions and fixed broadband subscriptions are expected to grow during the 2020-2025 period.

The mobile subscriber market increased between 2014 and mid-2020, with big players like Telstra (ASX:TLS) and Optus improving their respective subscriber base. Telstra is also working on improving its mobile virtual network operator (MVNO) and internet of things (IoT) subscribers during the same time frame. According to experts, growth in population and IoT adoption would drive Australian mobile subscribers’ growth.

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The sector has grown by over 50% in the last 12 months. The growth has been softer but still impressive, at 13.46% this year.

DID YOU KNOW: How are Australian telecom giants placed to leverage 5G Boom?

On that note, let us look at two stocks that have started April on a positive note – FSG and TPC.

Field Solutions Holdings Limited (ASX:FSG)

Licensed Australian telecommunications carrier Field Solutions Holdings Limited offers, builds, and operates 'true broadband networks' to people living in rural, regional, and remote areas. The Company witnessed significant growth in the last month. In March 2021, FSG stocks showed a marginal increase of ~1.25%. However, the stock has had a strong start in April.

On 06 April 2021, the Company announced signing a wholesale mobile virtual network operator (MVNO) deal with Optus to provide 4G and 5G voice and data services. The 5-year agreement with Optus would generate A$20 million in revenue over the deal period.

Last year, FSG collaborated with Optus under the Federal Government’s Mobile Blackspot Program to provide more telecommunications infrastructure around major rural regions.

Through the Optus relationship, the Company would be able to deliver voice & data services integrated into the FSG Regional Network. Businesses and customers would now have a broader range of product and services.

Optus is offering the Company full 4G and 5G access to its network to ensure the usage of critical network features throughout Australia. FSG's partnership with Optus also includes NBN POI backhaul, the federal government's mobile blackspot program, and the MVNO deal.

In April, FSG would commence onboarding and incorporation of the Optus MVNO product suite into its Ordnance orchestration platform. This would facilitate ordering as well as provisioning automation across FSG's retail and wholesale business divisions. This process would require three months to conclude.

FSG intends to launch its MVNO brand and related products & services in early FY2022.

Last month, FSG signed a wholesale supply, management, and collaboration deal to provide National nbn™, network management, and orchestration facilities to FlipConnect. The agreement is for three years and would generate A$24 million in revenue. FlipConnect is a prominent provider of Internet and OTT TV services.

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TPC Consolidated Limited (ASX:TPC)

TPC Consolidated Limited is a key player in the Australian communication space. The Company’s underlying business revolves around the MRTM (Mobile Real Time Monitoring) platform.

In March 2021, TPC shares dropped ~18%. However, the shares have been moving in an upward direction, delivering a growth of 1.763% in the last five days.

On 31 March 2021, TPC Consolidated Limited announced that its 100%-owned subsidiary, CovaU Pty Limited, had signed its first power purchase agreement with White Rock Solar Farm Pty Ltd. The Company is Goldwind International Holdings’ wholly owned subsidiary.

The deal adds to safeguard the delivery of reliable, inexpensive, and cleaner energy for its clients. The contract would also help CovaU Energy become a fast-growing Australian energy retailer.

DO READ: Three momentum stocks for March 2021

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