The best performer on the ASX 200 on Tuesday was the TPG Telecom Ltd (ASX: TPM) share price.
The telco company's shares ended the day almost 6% higher at $7.78.
Why did the TPG Telecom share price surge higher?
There appears to have been a couple of catalysts for today's share price gain.
The first is news on Monday that TPG Telecom has teamed up with Hutchison Telecommunications (Aus) Ltd (ASX: HTA) to pick up 5G spectrum through their joint venture – Mobile JV.
While Telstra Corporation Ltd (ASX: TLS) took the lion's share of the spectrum, Mobile JV got hold of a decent slice of its own.
It will pay $263.3 million in early 2020 for spectrum in major cities and regional areas.
These comprise a total of 60MHz in each of the major cities of Sydney, Melbourne, Brisbane, Canberra, Adelaide, and Perth. Whereas in the regional areas, Mobile JV secured eight 5MHz lots in total in Central, Northern, and Southern Queensland, Northern NSW, Regional Victoria, and Tasmania.
The weighted average of the price paid for the spectrum was approximately $0.29 per MHz per person, which was within expectations.
Investors may believe that this has positioned Mobile JV well to take on Telstra and attempt to win market share away from the telco behemoth.
Another potential catalyst for today's gain was TPG Telecom's upcoming meeting with the ACCC.
On December 13 the ACCC is scheduled to announce its decision on whether it will clear TPG Telecom's merger with Vodafone or extend the period for review. Some investors may be getting in early in anticipation of a positive verdict from the ACCC.
Should you invest?
While I think that TPG Telecom will be a very attractive company if its merger with Vodafone goes ahead as planned, I feel that its share price gain over the last few months means that this is more than reflected its shares now.
In light of this, I would class its shares as a hold at this stage and suggest investors consider Macquarie Telecom Group Ltd (ASX: MAQ) as an alternative.
