UK’s Fibre-Optic fund and top 5 FTSE telecom companies

Summary 

• The government has announced a new £4 million fund, specifically for the companies whose projects are trialling running fibre-optic broadband cables through water pipes.
• New innovative companies can help serve the dual purpose of fast connectivity and fresh and clean water.
• Fibre optic technology is used by homes and businesses to access the internet, telecommunication and TV services.

UK’s telecom sector is abuzz with the government’s announcement of a new £4 million fund, specifically for the companies whose projects are trialling running fibre-optic broadband cables through water pipes. Government’s focus has been on the alternative method of taking broadband to hard-to-reach homes without digging up roads as it will not only help in strengthening the broadband reach in rural areas but will also cut the cost to a great extent, as infra works like digging roads, installations of new poles etc are a costly affair for the telecom companies.

Fibre optics technology is used by homes and businesses to access the internet, telecommunication and TV services. Fibre optics uses pulses of light to transmit a large volume of data and information over a long distance. The optical fibre is as small as the size of human hair, which is bundled into the fibre-optic cable, making it capable of transmitting data faster than any other medium. As fibre optic cables carry the information in the form of light, they can cover long distances without any disruption. Matt Warman, the digital infrastructure minister, has said that innovative companies can help serve the dual purpose of fast connectivity and fresh and clean water.

Let us look at FTSE listed Fibre optics companies:

BT Group Plc (LON: BT. A)

The company provides a range of telecommunication services, including fixed-line broadband and mobile services, to millions of customers worldwide. The company delivers internet and TV services by using fibre optic cables, and it is one of the largest service providers in the UK and has operations in over 180 countries.

The company’s reported revenue was down by 3% at £5,071 million during the first quarter ended 30 June 2021, mainly due to flat revenue growth in the SME, Corporate and Public Sector segment, which was offset by the higher growth in the consumer segment. The company plans to expand its Fibre to the Premises (FTTP) network and cover more than 25 million customers by the end of 2026.

BT Group Plc’s current market cap stands at £17.3 billion as of 9 August 2021. In the last one year, the stock has given 65.2% returns to its shareholders.

Vodafone Group Plc (LON: VOD)

The company provides the communication service in Asia, Africa and the European markets. Vodafone Plc currently has over 315 million mobile customers globally. The company’s stock is a constituent of the blue-chip index FTSE100.

Vodafone plc has recently announced an additional share buyback program equivalent to £570 million amount of buyback. The share buyback program is open till 17 November 2021. The sole purpose of the buyback program is to reduce the issued share capital of the company.

Vodafone Group Plc’s current market cap stands at £32.78 billion as of 9 August 2021. In the last one year, the stock has given 1.5% returns to its shareholders.

Airtel Africa Plc (LON: AAF)

The company provides mobile voice and data services in the African continent. It also provides the mobile money service and has over 99 million customers in 14 countries across Africa. The company’s stock is a constituent of the mid-cap focused FTSE250 index.

Airtel Africa Plc has signed an investment agreement with Qatar Holding LLC. The Qatar Holding LLC will invest USD 200 million in the Airtel mobile commerce BV, a subsidiary of Airtel Africa Plc. The transaction values the mobile business at USD 2.65 billion, with Airtel Africa, continuing to hold the majority stake. In addition, the company is exploring opportunities for the potential listing of mobile money business within the next four years.

Airtel Africa Plc’s current market cap stands at £3.42 billion as of 9 August 2021. In the last one year, the stock has given 68.3% returns to its shareholders.

Ethernity Networks Ltd (LON:ENET)

Ethernity Networks Ltd provides the software solutions that the telecom companies use to provide a network to the end users. The company also provides the data processing and security software used in the deployment of 5G technology.

The company received a new contract in June 2021 to supply UEP-60 product used in 5G network distribution. This is the second major 5G contract which the company has received. The contract’s total value is USD 930,000, with the potential of follow-on orders and wider product offerings.

Ethernity Networks Ltd current market cap stands at £22.47 million as of 9 August 2021. In the last one year, the stock has given 176% returns to its shareholders.

Spirent Communications Plc (LON:SPT)

The company provides network testing and analytics solutions for telecom companies. The company provides its service in over 60 countries globally. The company is playing a vital role in the 5G technology ecosystem. It provides an automated testing solution and service for various network devices like Wi-Fi and mobile devices.

The company reported a 9% revenue growth at USD 255.1 million during the first six months ended 30 June 2021. The revenue growth was driven by 400 5G deals which the company signed during the first half of this year. The company has won over 1400 5G- related deals and is a global leader in 5G core network testing.

Spirent Communications Plc current market cap stands at £1.61 million as of 9 August 2021. In the last one year, the stock has given a negative return of 13.58% to its shareholders.