In morning trade the TPG Telecom Ltd (ASX: TPM) share price has followed the market lower.
At the time of writing the telco company’s shares are down 1% to $7.27 on the day of its annual general meeting.
What was revealed at the annual general meeting?
As well as taking shareholders through its FY 2018 result, management provided them with an update on the company’s performance so far this year.
In September TPG Telecom provided its FY 2019 guidance and revealed that it expected BAU EBITDA of $800 million to $820 million and BAU capex of $180 million to $220 million.
BAU EBITDA relates to its existing Consumer and Corporate Division operations and excludes any impact from its mobile network operations in Australia or in Singapore.
Whereas BAU capex excludes any expenditure in relation to mobile network builds in Australia or in Singapore and excludes spectrum payments.
The good news today is that its FY 2019 “year-to-date results are tracking well to the above guidance” according to management.
In addition to its financial performance, TPG Telecom provided an update on its merger with Vodafone.
Management advised that the transaction implementation preparation is well progressed and it is targeting completion in the first half of calendar year 2019.
One key date for your diary, though, is December 13. That is the provisional date for the announcement of the ACCC’s decision. On this date the competition watchdog will either provide clearance or extend the period for review.
Should you invest?
While I think the merger with Vodafone has the potential to be a game-changer for TPG Telecom and puts it in a great position to compete head on with Telstra Corporation Ltd (ASX: TLS), I’m avoiding the sector right now until I’ve seen improvements in trading conditions.
Until then, I would suggest investors look at telco and data centre operator Macquarie Telecom Group Ltd (ASX: MAQ) as good alternative.