The TPG Telecom Ltd (ASX: TPM) share price is down 0.5% after announcing it has acquired some 5G spectrum nationally.
TPG has said that its joint venture with Hutchison Telecommunications (Aus) Ltd (ASX: HTA), called Mobile JV, has been a successful bidder in an auction for spectrum in the 3.6GHz band. TPG must fund half of the purchase price.
Mobile JV will pay $263.3 million in early 2020 for the lots it has purchased. Those lots were twelve 5MHz lots, a total of 60MHz, in each of the major cities of Sydney, Melbourne, Brisbane, Canberra, Adelaide and Perth.
In the regional areas, Mobile JV secured eight 5MHz lots in total in Central and Northern Queensland, Southern Queensland and Northern NSW, Regional Victoria and Tasmania. It has also won lots in Regional Western Australia, Southern & Western NSW and in Regional South Australia.
The weighted average of the price paid for the spectrum was approximately $0.29 per MHz per person.
CEO of TPG, David Teoh, said "We are very pleased to have secured access to 3.6GHz spectrum through the joint venture as we continue to roll out our mobile network. The 3.6GHz band is well known to be a lead band for 5G networks which will deliver to consumers better speeds and more capacity for the future."
The TPG share price is up 36% over the past six months due to the merger with Vodafone Australia and the exciting synergies that may create.
I'm not sure TPG is a buy at the current price, the NBN problems aren't going away any time soon and the launch public launch of 5G is sometime away. I am unsure about the major telcos' chances of generating sustainable earnings growth without falling into the same problems that we're seeing with price competition with 4G.
