The Telstra Corporation Ltd (ASX: TLS) share price is up after the telco announced it has won the maximum possible low band spectrum.
Spectrum is what telco companies use to send data/phone signal to our phones. It kind of works like radio frequency – the more/better that the telco has, the stronger service it can provide customers.
Telstra wins more spectrum
The telco giant has invested $616 million to secure 2x 10MHz in the latest band auction by the Australian Communications and Media Authority.
This was the maximum amount of low band spectrum that Telstra was allowed to bid for under the competition limits set by the Government.
Telstra said this was a win for its customers, especially for regional and rural Australian communities and businesses.
The telco said that securing this spectrum part of its commitment to provide customers with the best mobile network across the country.
Current Telstra network
It now has 2x40MHz of low-band spectrum in the major cities and 2x45MHz in regional and remote areas. This is more than any other carrier, which it said was important considering it has the biggest customer base.
Over the seven years to the end of FY22, it will have invested $11 billion in its national mobile network, with $4 billion invested in the regional mobile network. It boasted that its networks covers more than 1 million square kilometres more than any other telco (the size of NSW and Victoria combined).
Vicki Brady, CFO and group executive of strategy and finance said Telstra will keep investing to ensure it maintained its leading mobile coverage and helped regional and remote communities fully participate in the digital economy:
“This is especially important as our nation rapidly digitises, as migration to regional areas continues at pace, and as billions of devices, like water sensors, home and business security cameras and smart meters are generating data like never before.
“All of these factors have increased demand on our network in regional Australia nearly threefold in the past three years. We will continue investing and this includes boosting regional connectivity with at least another 100,000 square kilometres of new mobile coverage as part of T25.”
Summary thoughts on Telstra and the share price
Telstra is doing all the right things to ensure its ongoing success as the telco market leader. Winning 5G could be far more important than 4G because of the new technologies that may use 5G. There’s also the potential to replace NBN connections with home wireless 5G internet, which comes with higher profit margins for Telstra.
I also like the diversification that Telstra has done geographically with Digicel Pacific and into different economic sectors with Telstra Health’s acquisition of MedicalDirector.
It’s now at the top end of my ASX 20 preferred blue chip list, though there are a couple of others I like even more. It could be an interesting option as one of thestable ASX dividend shares.
