Why the Superloop Ltd share price is soaring today

The Superloop Ltd (ASX: SLC) share price is 7% higher at $2.46 today after the Asia-focused dark fibre internet services business announced it has moved a step closer to getting its construction of a submarine internet connectivity cable between Australia and Singapore off the ground.

The company announced that a “system supply agreement” between the consortium wanting to finance the project and the company hired to construct it in Alcatel Submarine Networks was now at “Contract in Force” status.

Superloop and its consortium of partners that reportedly includes A-listers Google-owner Alphabet Inc and Telstra Corporation Ltd (ASX: TLS) are aiming to compete with rival fibre optic internet services provider Vocus Group Ltd (ASX: VOC) in providing a submarine internet traffic route between Australia and Asia.

Unfortunately, for Superloop its project has been widely reported as being around one year behind that of Vocus, which means Vocus should have a big first mover advantage in winning clients and turning profits.

However, the growing demand for data and internet traffic capacity means they’ll probably be sufficient demand to make both projects economically viable over the long term.

Superloop is also investing in the construction of fibre-optic cable networks under the streets of Singapore and Hong Kong in order to put commercial premises on-net and on sell the internet services to enterprise clients. This is a lucrative business model the likes of Vocus and TPG Telecom Ltd (ASX: TPM) have made big profits from thanks to their ownership of these fibre-optic networks whether built themselves or acquired as in the case with TPG’s Pipe Networks.

Investors looking to take on more risk may consider Superloop due to its growth potential, although I think the far superior risk-adjusted returns are offered by TPG and Vocus based on their current valuations.

Top 3 ASX Blue Chips To Buy In 2017

For many, blue chip stocks means stability, profitability and regular dividends, often fully franked..

But knowing which blue chips to buy, and when, can be fraught with danger.

The Motley Fool's in-house analyst team has poured over thousands of hours worth of proprietary research to bring you the names of "The Motley Fool's Top 3 Blue Chip Stocks for 2017."

Each one pays a fully franked dividend. Each one has not only grown its profits, but has also grown its dividend. One increased it by a whopping 33%, while another trades on a grossed up (fully franked) dividend yield of almost 7%.

If you're expecting to see the likes of Commonwealth Bank, Telstra and Wesfarmers shares on this list, you'll be sorely disappointed. Not only are their dividends growing at a snail's pace, their profits are under pressure too due to the increasing competitive environment.

The contrast to these "new breed" blue chips couldn't be greater... especially the very real prospect of significant share price gains, something that's looking less likely from the usual blue chip suspects.

The names of these Top 3 ASX Blue Chips are included in this specially prepared free report. But you will have to hurry. Depending on demand - and how quickly the share prices of these companies moves - we may be forced to remove this report.

Click here to claim your free report.

Motley Fool contributor Tom Richardson owns shares of Google, TPG Telecom Limited and Vocus Communications Limited. The Motley Fool Australia has no position in any of the stocks mentioned.

You can find Tom on Twitter @tommyr345

We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. 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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