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Vocus Group Ltd (ASX:VOC) down despite $136 million subsea cable contract win

Shares in telecommunications provider Vocus Group Ltd (ASX: VOC) slid 1.5% into the red today to sit at $2.59 at the time of writing on news of a $136 million Federal Government contract to build an international sub-marine cable between PNG, the Solomon Islands and Australia.

The company’s website yesterday confirmed Vocus would take part in the “centrepiece of Australia’s development assistance program to the Pacific” project, but there is no official ASX announcement made to shareholders as at the time of writing.

Trading volume on the Vocus registry today seemed as normal, but shareholders are in the dark in terms of the project’s confirmed capital expenditure, which is ominous given the company’s high-level of existing debt. It is likely Vocus will make a profit on the contract though having been awarded it.

All eyes are on the telecommunications sector right now.

Telstra Corporation Ltd (ASX: TLS) today announced plans for a drastic restructure that could see 8,000 staff sacked.

All of this unrest is good news for emerging player TPG Telecom Ltd (ASX: TPG), which waits patiently in the wings ready to pounce on market share up for grabs.

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Motley Fool contributor Carin Pickworth owns shares of Telstra 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.

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