$4 by end of year?

Hi All,

Just wanting to gauge sentiment and share opinions on Aussie Broadbands future value and growth. Since buying in at $2 a couple of weeks after the IPO, I've felt pretty confident that we'd say Aussie Broadband at least peak to, if not stablise at $4 after 12 months; let's say by the end of this calendar year at the latest. Aussie Broadband has been growing relatively consistantly at a rate of 80 to 100% per year, at least in terms of customers. I expect this to naturally taper off now that new NBN signups have largely evaporated, but I believe we'll still continue to see a healthy churn rate away from the incumbent telcos to Aussie Broadband.

More importantly, Aussie Broadband attracts a much higher uptake rate from power users (high speed users) and business users. Aussie Broadband has more 250mbps+ customers than all the other telcos combined (15,000 out of 24,000 total; going off ACCC December 31 report). So Aussie isn't only continuing to grow at a decent pace, they're attracting the majority of the most profitable customers.

I don't see Aussie Broadband ever gaining the customer base of Telstra or TPG (at 46% and 25% market share), but I see them commanding at least a 10% of the fixed broadband market share in the next few years, with most of those being the most profitable customers. I see the market cap probably topping out at $3 billion (SP $15) in the near term (next 4 to 5 years). I think Aussie will then have to consider either attracting more mainstream customers which will likely mean reducing retailer prices and therefore margins, risking losing longer term customers due to decline in service quality, or otherwise diversifying into backhaul infrastructure and other services. I'm hoping for the latter.

Anyway, that's my off-the-cuff two cents. Curious to hear others thoughts and predictions.