It’s a good day for the Telstra Corporation Ltd (ASX: TLS) share price despite criticism of its proposed deal with TPG Telecom Ltd (ASX: TPG).
Competitor Optus has reportedly slammed the agreement that, if approved by regulators, will see Telstra and TPG sharing mobile infrastructure networks.
At the time of writing, the Telstra share price is $3.99, 2.84% higher than its previous close.
For context, the S&P/ASX 200 Index (ASX: XJO) is currently up 0.02%.
Let’s take a closer look at what might be going on with the telco giant’s stock.
What’s going on with the Telstra share price?
The Telstra share price is trading at its highest point in four weeks on Wednesday.
Meanwhile, the S&P/ASX 200 Communication Index (ASX: XTJ) is the ASX 200’s best performing sector, gaining 1.7%.
Leading the sector is the TPG share price’s 3.04% gain. Telstra’s gain makes it today’s second best performing ASX 200 communications stock.
The companies’ gains come amid news that Optus CEO Kelly Bayer Rosmarin has criticised a deal signed between the ASX-listed telcos.
The deal will bring “higher prices, worse service, and less resilient communities”, Bayer Rosmarin was quoted by The Sydney Morning Herald as saying.
The comments come as the Australian Competition and Consumer Commission (ACCC) considers a merger application from Telstra and TPG, made public yesterday.
The deal will see TPG able to access around 3,700 Telstra mobile network assets. Meanwhile, Telstra will get access to TPG’s spectrum across 4G and 5G. It’s expected to bring Telstra revenue of between $1.6 billion and $1.8 billion over an initial 10-year term.
A Telstra spokesperson was also quoted by the publication as saying:
While new to the Australian market, active network sharing is common in Europe and North America.
Some of the criticism of the Telstra-TPG deal has come from competitors who either cannot think beyond the infrastructure sharing models of the past or who were not bold enough to get there first.
Today’s gains included, the Telstra share price has slipped 5% since the start of 2022. Though, it’s nearly 15% higher than it was this time last year.
The post Why is the Telstra share price dialling higher today? appeared first on The Motley Fool Australia.
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More reading
- Why did the Telstra share price backtrack in May?
- Analysts name 2 ASX 200 dividend shares to buy now
- These 3 shares are topping the ASX 200 volume charts on Wednesday
- Is Telstra an ASX 200 share worth owning right now?
- ASX shares paid out a record $98b in dividends in the 12 months to March. Which are the star performers?
Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has positions in 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 Scott Phillips.
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