Key developments

Telco stocks in Australia and New Zealand have seen wide spreads in performance over the last 12 months. Economic growth is expected to remain sluggish relative to previous years, creating uncertain performance for telco equities.

Singtel

Singtel’s stock rose by over 16% over the last month, and the most notable company release from the company was that The Australian Competition and Consumer Commission (ACCC) announced that it would not oppose the proposed regional network and spectrum sharing agreements between Optus and TPG. Under the proposed regional Multi Operator Core Network (MOCN) arrangement, Optus will provide TPG with access to its regional radio access network and they will share spectrum in regional Australia.

Aussie Broadband

Aussie Broadband’s stock rebounded over the last month, up around 15% on the back of its FY24 full year results release in late August where the company recorded 27% YoY revenue growth from $999.7m of revenue and 34% YoY EBITDA growth from $120.5m of EBITDA. The company announced in September that it had sold the remainder of its stake in Superloop (12% of the issued capital in that business) for a pre-tax gain on sale of $42.7m.

Megaport

In the last month Megaport’s stock has declined around 12% despite the company not releasing any price sensitive announcements, suggesting the market is still reacting to the company’s poor FY24 results release in late August. This release featured FY25 guidance of anticipated revenue in the range of $214-222m and EBITDA in the range of $57-65m for the FY25 financial year, which did not meet investors’ expectations.

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