The Telstra Corporation Ltd (ASX: TLS) share price has had an interesting week. Telstra shares started Monday off at a price of $3.42 a share. But by Wednesday, those same shares dipped to as low as $3.32, a fall of more than 3% from Monday’s level. By the end of the week, we saw Telstra return to a share price of $3.40.
That was despite some interesting developments along the way. On Thursday, we discussed how Pengana Capital holds Telstra shares as its biggest holding. As my Fool colleague Tony reported, Pengana Capital chief investment officer Rhett Kessler has Telstra “as just under 8% of our portfolio”. Why? Mr Kessler stated that Pengana likes the telco because “when you buy Telstra shares, you’re buying the best mobile phone network in the country. And you’re buying a really nice inflation-protection bond from the government”.
Telstra gets 5G boost
On Friday, it was revealed that Telstra has secured 1,000 MHz in the 26 GHz spectrum auction, spending $277 million to do so.
Here’s some of what Telstra CEO Andy Penn said of the acquisition:
Telstra is already leading the way in 5G, and this investment of $277 million in highly sought after spectrum will help us broaden and deepen our 5G connectivity for more Australians across the country…. mmWave spectrum is especially good at providing high-speed mobile broadband in high-density areas, such as built up cities and towns, train stations, sport stadiums and other locations with a high concentration of people using their mobile devices.
So what’s next for the Telstra share price? Well, Telstra has been hovering around its current pricing level since late March. Before then, the telco had been on a bit of a bullish run, appreciating more than 12% between 11 March and 30 March. This share price run was sparked by Telstra’s announced plans to structurally separate itself into 4 divisions by December this year. Investors are evidently expecting that this separation will unlock value from some of Telstra’s more defensive assets. Such as its mobile towers and fixed-line networks.
Considering all of this, it will be interesting to see how the market continues to price Telstra. The separation plans are likely to continue to set the tone for the company. Especially in conjunction with the 5G spectrum announcement on Friday.
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More reading
- ASX 200 finishes flat, Kogan drops, Accent jumps
- What’s with the Telstra (ASX:TLS) share price and other telcos today?
- History is on the side of the battered AMP (ASX:AMP) share price as it plans its demerger
- ASX 200 down 0.1%: Kogan crashes, AMP’s demerger plans, Telstra strengthens 5G network
- Telstra (ASX:TLS) share price on watch after 5G update
Motley Fool contributor Sebastian Bowen owns shares of Telstra Limited. The Motley Fool Australia owns shares of and has recommended Telstra 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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