There's something for everyone in the telecommunications industry with Telstra Corporation Ltd (ASX: TLS) shares, TPG Telecom Ltd (ASX: TPM) shares and Vocus Group Ltd (ASX: VOC) shares.
Telstra
Telstra is Australia's 500-pound Gorilla of the telecommunications industry. The company is one of the leading providers of fixed services like broadband and home phone, as well as infrastructure and network applications. However, the jewel in Telstra's crown is its mobiles business, which has more than 17.4 million subscribers and accounts for around 39% of group revenue.
Telstra has acknowledged that it has work to do if it is to adapt to the ongoing rollout of the national broadband network, which will allow smaller competitors to effectively compete on price for fixed household services. However, a recent draft decision by the ACCC to block an attempt by rival telcos allowing them to have mandatory access to Telstra's mobile network was a big win for the company.
According to Morningstar, analysts expect Telstra to pay dividends equivalent to a yield of more than 6.5% fully franked in the next 12 months.
TPG Telecom
TPG Telecom was one of the big losers from the ACCC's draft decision not to grant other telcos access to Telstra's mobile network. However, under the watch of David Teoh, TPG Telecom has repeatedly proven itself to be a shrewd capital allocator, paying dividends for shareholders over the long term.
The company's recent decision to push into mobiles was met with applause from investors, who have witnessed the company's broadband bundles take a big slice of that market, with 1.91 million subscribers, in a short amount of time. Investors are hoping they can do the same in the mobiles market. At the beginning of the year, TPG had 453,000 mobile subscribers, many using the Vodafone network.
While the group plans to grow its mobiles presence, it is also targeting the Singaporean market and continues to roll out its own fibre networks in densely populated Australian cities.
Vocus Group
Like Telstra and TPG, Vocus has had a tough run over the past year — only worse. The owner of Dodo, iPrimus, Eftel, Slingshot, M2 and many other brands is currently digesting its most recent acquisitions, including Amcom, M2 Group and NextGen Networks. With Vocus recently announcing a downgrade to profit guidance, its share price tumbled.
However, the company is still targeting significant synergies as it integrates its three recent takeovers and appears to be performing well on the National Broadband Network. While it is a higher risk investment than the others on this list, it could hold long-term potential.
Foolish Takeaway
None of these companies has performed well in recent times. However, much of the recent share price falls may be attributable to a slump in investor sentiment. Therefore, with a view to the long term, investors may be staring at an opportunity to buy some good but beaten-up businesses.
