Macquarie Telecom Group Ltd (ASX: MAQ) shares headed lower today, falling 3.35% to $46.97 by the market's close.
Just one of many companies that have taken a hit in today's ASX market slump, the Macquarie Telecom share price slide also comes on the heels of news the telecom service provider has signed a new deal with Optus.
Let's take a closer look at the company's new agreement.
Macquarie Telecom just said 'yes'
It was reported in The Australian today the company has ended its existing wholesale mobile contract with Telstra Corporation Ltd (ASX: TLS), in favour of Optus.
According to report, Macquarie Telecom has signed an exclusive deal worth approximately $34 million "with Australia's second-biggest telco to deploy mobile services including 5G to its 100,000 business customers".
In addition to Optus' 5G network, Macquarie will also gain access to other cellular services. Macquarie Telecom claims it wants to "expand its mobile business and hire more staff over the next three years."
As reported by IT News, Macquarie Telecom group executive Luke Clifton said:
2020 changed the way Australians work forever.
By providing 5G connectivity along with business grade NBN, we can ensure Australian businesses can work from more places than ever before.
Optus was the clear choice in terms of superior technology, flexibility to build the right solutions, and cooperation. It is leading Australia's wholesale 5G market, offers incredibly fast 5G and continues to invest heavily in its 5G network.
The company did not disclose how long the deal would be in effect, other than to say it was "multi-year".
Aussie Broadband Ltd (ASX: ABB) also made the switch last month from the Telstra to Optus mobile network.
What does the company do?
Macquarie Telecom is a business-to-business endeavour operating through two segments, namely its telecom and hosting segments.
The telecom segment relates to the provision of voice and mobile telecommunications services and the provision of services utilising the Macquarie Telecom data network. The hosting segment is focused on providing services utilising the company's data hosting facilities. Macquarie generates the majority of its revenue from the telecom segment.
Macquarie Telecom share price snapshot
Despite today's losses, the Macquarie Telecom share price has been on an upward trajectory over the past 12 months. In the midst of the COVID-19 sell-off, Macquarie Telecom shares reached a 52-week low of $19.20.
If you had bought shares exactly one year ago, you would now be sitting on a healthy return of over 90%. However, year to date, the company's shares have fallen by nearly 10%.
Based on the current share price, Macquarie Telecom has a market capitalisation of around $1 billion.
