By Kumar Tanishk
Oct 12 (Reuters) – Telecom stocks in Australia and New Zealand tumbled on Monday after SpaceX’s acquisition of a nationwide spectrum portfolio in the US stoked fears that satellites could challenge legacy telecom firms and their network coverage.
Australia’s top telecom firm Telstra shed 2.5% to finish at a six-week low, while no.3 operator, TPG Telecom, lost nearly 5% in its worst day since early June. Spark New Zealand slipped 1.8%.
Here are some details:
** SpaceX last week struck a deal to buy a nationwide low-band spectrum portfolio, moving Elon Musk’s satellite venture closer to mounting a direct, orbital challenge to legacy wireless giants across the United States.
** That sent telecom stocks in the U.S. and Europe tumbling on concerns over growing competition from satellite-based mobile services.
** Low-band spectrum can travel longer distances and penetrate buildings and other obstacles more effectively than higher-frequency airwaves.
** “Investors fear the U.S. is just the first market, and that incumbents’ biggest advantage, coverage, is losing its value,” said David Tuckwell, CIO at ETF Shares in Sydney.
** Tuckwell sees coverage-reliant Telstra as most exposed, though the near-term threat is to regional pricing power, not subscribers.
** Citi analysts said, “While SpaceX’s spectrum purchase is likely to weigh on Telstra’s share price, it also shows the importance of having terrestrial spectrum”.
** Citi reiterated their “buy” call on Telstra citing upside to 2027 financial earnings guidance.
** Australia’s mobile market is dominated by Telstra, Singapore Telecommunications-owned Optus, and TPG Telecom, with Superloop and Aussie Broadband jostling at the fringes.
** Superloop shed 2.4%, while Aussie Broadband lost nearly 2%.
(Reporting by Kumar Tanishk in Bengaluru; Editing by Nivedita Bhattacharjee)
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