The Telstra Corporation Ltd (ASX: TLS) share price is in the red today amid the company coming under fire from competitor Optus over its use of hundreds of new mobile sites.
Telstra shares are swapping hands at $3.925 at the time of writing, a 0.88% fall. For perspective, the S&P/ASX 200 Index (ASX: XJO) is up 0.26% so far today.
Let’s take a look at what is happening at Telstra.
5G competition heats up
Telstra’s major mobile competitor Optus has written to the Australian Competition and Consumer Commission complaining about the telco’s 5G strategy, the Australian Financial Review reported.
According to the report, Telstra has registered hundreds of new mobile sites on spectrum it will soon lose access to without any “clear commercial purpose”, Optus alleges.
Optus is concerned Telstra is blocking it from gaining early access to new spectrum slots it secured at a government spectrum auction year.
The company said (as quoted by the AFR):
Especially when Telstra has to undertake physical site installation and decommissioning all within the next 24 months prior to Optus acquiring its spectrum licence in 2024.
Telstra’s conduct represents a serious breach … and should be dealt with in a timely manner to prevent further and ongoing harm to competition in mobile markets.
Spectrum is a collection of radio waves that enable mobile devices to communicate with each other. The federal government manages the allocation of spectrum.
In response to the concerns from Optus, Telstra told the AFR it has registered the new sites to free up other spectrum bands for 5G and migrate its 3G services. The telco said:
This will improve our 5G services whilst also maintaining the quality of our 3G services.
Last week, Telstra entered an agreement with TPG Telecom Ltd (ASX: TPG) that will see it gain access to TPG’s 4G and 5G spectrum.
In return, TPG will gain access to around 3,700 of Telstra’s mobile network assets. However, the ACCC has indicated it will be looking at the deal very closely.
Telstra share price snapshot
The Telstra share price has gained nearly 27% over the past year. In the year to date, it has fallen 6%.
For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned nearly 7% over the past year.
Telstra has a market capitalisation of about $46 billion based on its current share price.
The post Battle for 5G: here’s why Telstra (ASX:TLS) is ruffling feathers of its rival appeared first on The Motley Fool Australia.
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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns and has recommended Telstra Corporation Limited. The Motley Fool Australia has recommended TPG Telecom Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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