The telecom industry in Australia has three major carriers and an infrastructure provider, the National Broadband Network (NBN), which provides fibre and fixed-line networks. The impact of the pandemic reinforced the importance of home-based internet services. Remote working saw a greater reliance on home broadband for everyday activities, and online education became routine. Video content streaming also boomed. Online shopping witnessed substantial growth, with over a million more Australians shopping online. Data traffic was at an all-time high in 2021, with many Australians increasing their internet speed and further upgrading to unlimited data plans. The communications sector has continued to transform, investing in 5G infrastructure and alternative services such as edge and cloud computing to drive future revenue growth.
The Australian telecommunications network is a dynamic entity that is undergoing constant development in response to growing community demand and technological change. The relationship between big data, cloud computing, and the Internet of Things (IoT) creates substantial opportunities for businesses to see exponential growth.
Reference: The Australian Competition and Consumer Commission (ACCC).
Let’s look at the five best ASX companies in the telecommunications sector that are listed on the Australian Stock Exchange (ASX). These are as follows:
[Note]: The market cap and the share price of the selected ASX companies below are mentioned as of 16 January 2024.
Telstra Group Limited (ASX: TLS)
Market cap: $46.22 billion
CMP: $4.00
The company's impressively fast progress with its Intercity Fibre project serves as an example of the large-scale developments currently underway. Despite only being announced in February 2022, construction is well underway, with more than 400km of cable already laid. The five additional routes have also already started to undergo detailed planning, with construction set to start in 2025. With its Intercity Fibre project, the company is expected to develop the necessary infrastructure to support Australia's digital expansion, providing utility to the populace by facilitating cloud and artificial intelligence (AI), remote working and education needs, health services, etc.
TPG Telecom Limited (ASX: TPG)
Market cap: $9.56 billion
CMP: $5.14
TPG Telecom's multiyear initiative, encompassing operational refinement, improved customer interactions, and enhanced internal systems, has the potential to significantly enhance operational efficiency. Concurrently, the ongoing expansion of its mobile network to 5G across multiple sites underscores the company's dedication to leading in technological advancements and addressing customer needs for quicker and more reliable connectivity. TPG Telecom's recent strategic steps yield numerous advantages. The acquisition of new debt facilities totaling $2.5 billion, coupled with debt restructuring, enhances financial stability. The desire to improve customer experiences, streamline operations, and simplify the brand all contribute to increased efficiency, competitiveness, and alignment with market trends.
Spark New Zealand Limited (ASX: SPK)
Market cap: $8.85 billion
CMP: $4.88
Contracts were established with the Crown to acquire the C-band mobile spectrum. Spark, One New Zealand, and 2 Degrees have committed an extra $24 million each to the RCG from 2023 to 2025. This funding aims to expand mobile coverage in rural New Zealand and decrease mobile black spots on state highways. Spark has also pledged to hasten the deployment of its 5G network to 25 regional towns, including new sites not initially planned. Furthermore, the upcoming satellite rollout will address connectivity challenges in remote rural areas where mobile networks have limitations.
Chorus Limited. (ASX: CNU)
Market cap: $3.15 billion
CMP: $7.25
Chorus is actively transitioning to a fibre-focused strategy, with fibre connections now constituting 81% of its total connections. Following the successful ultra-fast broadband rollout and new regulatory guidelines, the company's emphasis is on network operations. There is a growing demand for high-quality content, with streaming video accounting for 45% of network traffic. To meet this demand, Chorus is upgrading its fibre network to offer Hyperfibre multi-gigabit capabilities and significantly increase metro data capacity.
Nine Entertainment Co. Holdings Limited (ASX: NEC)
Market cap: $3.24 billion
CMP: $1.995
Nine has continued to outperform in its operating sectors, particularly in the advertising market, leading in television ratings and overall television costs. The Metro FTA market is predicted to contract in Q1 FY24, while 9Now continues to rise. Total television expenditures are predicted to be steady in FY24, with the first half reflecting additional sports and the second half being lower than in H2 FY2023. Nine Radio's advertising sales are likely to fall in the first quarter, despite digital revenue getting tripled and a growing contribution from streaming. Stan's sales and EBITDA are expected to expand further, according to the business. The expansion of digital audiences boosts Nine's Publishing division, with digital subscription revenue forecast to increase by 10% in Q1.
Reference: *All Data has been sourced from Company announcements and Refinitiv, Thomson Reuters
Frequently Asked Questions (F.A.Q)
Who regulates the telecommunications industry in Australia?
ACMA is a statutory authority with specific regulatory powers conferred on it by a number of Acts, including the Telecommunication Act, the Telecommunications Act 1999, the Spam Act, and the Do Not Call Register Act.
What are the top ASX telecommunication companies?
• Telstra Group Limited (ASX: TLS)
• TPG Telecom Limited (ASX: TPG)
• Spark New Zealand Limited (ASX: SPK)
• Chorus Ltd. (ASX: CNU)
• Tuas Limited (ASX: TUA)
What is the FY2023 performance of Telstra Group Limited?
The company saw its revenues grow by 6.7%, from $21.2 billion in FY22 to $22.7 billion in FY23. As a result, the EBITDA and net profits also saw substantial growth of 8.4% to reach $7.8 billion and 13.1% to reach $2 billion, respectively, for the same period. The company had a capital expenditure of $3.8 billion during FY23, up 25.1% from $3 billion in FY22. The final cash balances declined by 7.6% from $1.1 billion at the end of the previous financial year to $1.04 billion as of 30 June 2023.
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