The telecom sector has been out of favour for a couple of years now but I think the baby has been thrown out with the bath water...TPG in particular seems attractive. Despite the hit they took due to the NBN and the resulting share price decline I think it has a bright future as the lowest cost operator. I’m picturing a future where many appliances, tools etc will have connectivity, the ‘internet of things’ etc. will all rely on fast internet connections serviced by the soon to the unveiled 5g. Most brokers & analysts are either bearish or neutral on the sector, I’ve taken a contrarian view with a 5 year timeframe.
I am just an end user of TPG NBN. They are the best company I have ever used. Been with them for 2 years. I am on the 50 MBPS NBN plan and their internet is the best. All for $69.99 per month with unlimited downloads. As an investment I don't know, I prefer simple ETF's. But one thing for sure most people want bang for buck and you certainly get that with TPG.
If you are looking 2 to 5 years a great bet, history clearly shows how savvy TPM have been from getting on than jumping off each paradigm changing network tech boom, from personal pc boom, dial up boom, adsl boom, dark fibre boomand TPM is about to ride the Mobile 5g boom. In the immediate 12 months TPM will potentially bid a billion dollars in the 3600mhz spectrum auction later this year.
And they’re still paying for the recently acquired mobile spectrum in Australia. I think sooner or later the market will recognise the future revenues. At present it seems to be factoring in a lot of downside. Yes capex has been huge.
Yes adding another billion is a lot but over the years it will be peanuts. Caveat I work at tpm and I am just stating information in the public domain.
Goldman Sachs downgraded TPG to Sell and $4.80 target. Share price rallied this week (as did all Telcos) I wouldn’t be surprised if we’re seeing some asset re-allocation out of bank sector and into telcos. Royal commission hurting bank sentiment in the short term
