Doug Goodwille from Kayne Anderson speaks to Drew Meredith from The Inside Network on market thinkers.
While a surging gold price is on hold as the world adjusts to a Trump presidency, all the factors that saw its price rise more than 50 per during his first term in office – trade disputes, fiscal deficits and geopolitical tensions – are almost certainly guaranteed the second time around.
Tuas expands 5G network, share price surges
The Tuas Ltd (ASX: TUA) share price is up around 5% after the Asian telecommunications business announced it has bought more 5G spectrum.
Tuas is an Asian telecommunications business which is building a position in Singapore to offer mobile services to customers there.
Tuas buys more spectrum
Tuas announced that it took part in the quantity stage of the 2.1 GHz spectrum auction conducted by the Singapore Infocomm Media Development Authority.
TPG Singapore has been provisionally awarded 10 MHz (being 2 paired 5 MHz lots) of spectrum in the 2.1 GHz band for a price of S$31 million.
An assignment stage of the auction, which will determine the position of the lots within the spectrum band, is still going to be completed.
The licence of the 2.1 GHz spectrum is for 15 years and requires the spectrum to be used for standalone 5G network services. TPG Singapore intends to “move quickly” to commence rolling out 5G equipment to make use of this spectrum.
Management comments
TPG Singapore CEO Richard Tan said: “We are delighted that we were able to secure this important 5G band which is well supported by the global device ecosystem. Our customers can look forward to very competitively priced services when we embark on our network upgrade, commencing in the first half of 2022.”
My thoughts on the Tuas share price
The telco is doing the right things to expand in Singapore. 5G is obviously the next key area of growth for the sector and this spectrum will allow Tuas to compete more evenly with the existing players.
Tuas recently said that TPG Singapore, the operational business of the group, achieved positive EBTIDA (EBITDA explained) of S$0.9 million for the 12 months to 31 July 2021, and had continued to “track positively” in the first quarter of FY22.
Making positive profit on a day to day level is an important step for a business that’s investing for growth.
It was also expecting to achieve its 4G rollout in this calendar year, with regulatory licence conditions for outdoor coverage, indoor coverage and road tunnels being fully met, with coverage in those areas consistently exceeding 99.3% in regulatory testing. Most rail tunnels and stations are already serviced.
The potential prospect of further geographical growth in the long-term adds further interest to the business.
I’d be happy to have it in a small cap portfolio. Telecommunication services are pretty defensive as well, which means it may be solid during market disruption, like the Omicron variant.
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