MENU

Could this stock be a big winner from the NBN fibre-to-the-curb expansion plan?

News that the company rolling out the national broadband network (NBN) will be expanding its fibre-to-the-curb footprint is not only great news to the 1.5 million homes and businesses that will enjoy faster and more reliable internet speeds but it could prove to be a windfall for one ASX company.

I am not talking about Telstra Corporate Ltd (ASX: TLS) or its peers like TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC). Sure, the customers of these telcos will be excited but the earnings challenges facing the sector isn’t about to change on the back of this announcement.

The stock that could reap a material financial benefit is broadband equipment developer Netcomm Wireless Ltd (ASX: NTC).

The original plan for the NBN was to connect expensive fibre cables to local exchanges (called nodes) and use existing copper or pay TV cables to connect homes to the internet.

This is a more cost-effective way to deliver fast speed broadband but the poor condition of existing wires and cables has created several headaches for consumers.

This has forced NBN Co Ltd (the company in charge of the NBN) to use fibre all the way to the curb in some areas so that less of the existing wires and cables will be needed to complete the connection. This will certainly mean much faster and dependable broadband to those lucky enough to be in the right suburb.

While Netcomm provides the equipment to connect NBN customers wirelessly to the node, it is also the only authorised supplier of Distribution Point Units (DPUs) and Network Connecting Devices (NDCs) to NBN Co. These are necessary devices for the FTTC rollout.

However, Netcomm has issued an announcement to the ASX stating that it has not received any new orders for DPUs or NDCs to support the latest FTTC deployment.

On the other hand, the company acknowledged that it is “hopeful” that as the rollout progresses, it will receive further orders.

The announcement was enough to get investors thinking. Netcomm’s share price jumped 7.7% in late afternoon trade to $1.26, although shares in Telstra is also 1.1% higher at $3.14 and Vocus is 3.5% stronger at $2.40.

TPG Telecom is bucking the trend though and is 0.5% lower at $5.48 when the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) is 0.7% higher.

Investors may be concerned that the expansion of NBN’s FTTC footprint will impact on TPG Telecom’s plans to deliver fibre connections directly to metro city customers.

If you are looking for other technology stocks that are well placed to outperform, the experts at the Motley Fool have just the thing for you.

They have produced a free report on three stocks that they believe will be the technology disruptors of tomorrow.

Click on the link below to get your free copy of this report.

The Richest Man Alive Invests in This

The richest man in the world has just launched a $100 million investment fund and investors who don't take note could miss out on a massive opportunity.

And it isn't by sheer luck. He did it by looking to the future and investing in the big ideas of tomorrow.

This could be your chance to get in on the ground floor!

Click here to discover more!

Motley Fool contributor Brendon Lau owns shares of NetComm Wireless Limited, TPG Telecom Limited, and Vocus Communications Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited, TPG Telecom Limited, and Vocus Communications Limited. 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 Scott Phillips.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.