I dont think the TPG-Voda non-merger will effect us directly, I dont see a reason to conclude that TPG will compete more aggressively with us on Fixed-Line, its all about mobile, mobile isnt a strength in our product mix, so its hard to damage us there.
Our customer numbers did start going up with the new management at last report IIRC, and we are an MVNO with Optus which is trying to catchup to Telstra (in mobile), and well clear of Vodafone, so they shouldn't be effected either.
Telstra could see some collateral damage, there Share Price was at a long term low before this merger was announced, there was a lot of concern about their mobile margins if TPG aggressively entered the mobile market (mobile is where Telstra gets most of their profits). So Telstra could see some SP pressure today.
Indirectly the longer our competitors are distracted with corporate level stuff and not focused on innovating their products the better it is for us. And it has a long way to go. Even if they fight this decision (might take upto a year), and win, they would still need to get approval from the Foreign In Review Board, who would have to consider that the #2 and #3 telcos in Australia would in practice be majority foreign owned.
The effect so far is that Vodafone they have shelved their NBN product, TPG have $1b of spectrum they arent getting a return on, its difficult for them to plan new products that might compete with each other e.g. Fixed wireless.
I suspect TPG is going to have a bad half-year report with related issues finally starting to influence the balance sheet, like reduced margins on NBN (they have highest percentage of profits from consumer than any other telce), falling mobile numbers, further write downs on spectrum.
We could get dragged down a bit with bad sentiment on the whole sector, but generally im still happy holding, im looking forward years not month, there is still a lot of room for growth for us, and i feel we are gradually sorting out issues that have been in our way in the past.
VOC Price at posting:
$3.86 Sentiment: Buy Disclosure: Held
