TPG Shares Up 6.52% after 5G Spectrum Auction

At time of writing, TPG Telecom Ltd [ASX:TPM] shares are trading at $7.84. This marks an increase of 6.52% from yesterday’s figures, which were sitting at a small 0.14% decrease.

Yesterday, the 5G spectrum auction took place amongst Australia’s telco companies. TPG released an announcement on the ASX following the auction, saying they successfully acquired national coverage through their joint venture with Vodafone.

The spike today likely comes from the growing understanding of just how well this acquisition places TPG among the telco giants.

In fact, TPG is the only telco to join Telstra — the sector’s Aussie leader — in securing 5G coverage in all of Australia’s major cities.

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TPG’s joint venture pays off

Back in August, TPG merged with Vodafone to create a new group listing on the ASX. The logic behind this play was that only by merging the third and fourth largest Aussie telco’s, could there be any chance of keeping pace with the top two — Optus and Telstra.

Even then, investors seemed optimistic about the merger, with TPG’s share price hiking by 16% on the day of announcement. And their optimism appears to be well-warranted.

On 21 September, The Australian Competition & Consumer Commission (ACCC) accepted an undertaking from Mobile JV in connection with the merger.

The venture was made as a means to successfully acquire, hold and allocate the then upcoming 5G spectrum release.

And then yesterday, it was announced that Mobile JV was a successful bidder in the 3.6GHz spectrum auction. Mobile JV scored 12 %MHz lots in each major Australian city, as well as eight lots in Central and Norther Queensland, Southern Queensland, Northern NSW, Regional Victoria and Tasmania. Nine lots were acquired in Regional Western Australia, six in Southern and Western NSW, and four in Regional South Australia.

Needless to say, that’s a fair amount of national coverage.

How this sets up TPG’s future

In total, Mobile JV managed to secure 131 lots of 5G coverage across Australia. This was capped only by Telstra, who managed to secure 143 lots.

Such a success makes TPG a worthy competitor in the Aussie telco race.

TPG CEO, David Teoh says of the result:

We are very please to have secured access to 3.6GHz spectrum through the joint venture as we continue to roll out our mobile network…[It] will deliver to consumers better speeds and more capacity for the future.’

Of course, other factors such as customer service, product quality and competitive pricing will always remain factors of volatility in the telco market.

Keep an eye on this space for the latest news in this and other sectors.


Ryan Clarkson-Ledward,
For Money Morning

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Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

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