Why the Aussie Broadband (ASX:ABB) share price is surging higher today

The Aussie Broadband Ltd (ASX:ABB) share price is surging higher today after announcing a new white label launch and providing a connections update…

| More on:
jump in asx share price represented by man jumping in the air in celebration

Image source: Getty Images

In morning trade, the Aussie Broadband Ltd (ASX: ABB) share price has been a positive performer.

At the time of writing, the internet service provider’s shares are up 4.5% to $3.08.

Why is the Aussie Broadband share price pushing higher?

This morning Aussie Broadband announced the launch of a new white label solution for major retail brands.

This will allow retail brands to sell Aussie Broadband’s internet and VoIP services under their own brand. Aussie Broadband will also provide customer support, service delivery, account and credit management.

Positively, the company has already signed its first white label customer – a large retail business with more than 3 million customers across Australia.

While the company is unable to disclose the name of the customer for commercial reasons, it is worth noting that Kogan.com Ltd (ASX: KGN) recently surpassed 3 million customers in Australia.

As part of this agreement, Aussie Broadband expects to transfer more than 25,000 of the customer’s existing broadband and VoIP services to its network. The first tranche of customers will transfer to the company’s services in early FY 2022.

Aussie Broadband’s Managing Director, Phillip Britt, commented: “We have built scalability into our network and support platform to take on additional white label customers as it is an important pillar in Aussie Broadband’s growth strategy.”

“The market is evolving as we’re seeing a number of well-known Australian retail brands across several industries either looking to expand into telecommunication services under their own label, or needing a higher quality customer experience for their existing telco customer base to match their brand promise.”

“Our excellent reputation in the industry and our new white label capability makes Aussie Broadband a logical choice for any major retailer looking for a high-quality telco product. It gives us access to an alternative channel to grow our market share with residential and business connections,” he added.

The release advises that its new white label capacity provides NBN, Opticomm, and VoIP services, allowing white label customers to choose elements from Aussie Broadband’s product cycle that suit their needs.

Connections update

In addition to the above, the company provided an update on its connections.

During the third quarter of FY 2021, the Telstra Corporation Ltd (ASX: TLS) rival reported net broadband additions of 30,424. This brought its total connections to 373,058 and does not include the aforementioned white label deal.

Mr Britt said: “The quarterly increase in connections is a testament to our strategy and core offering, providing high quality customer support and enabling innovative, technology-led solutions to drive efficiency in the company. We continue to scale the business with our new white label solution which will boost our market share and allow us to increase the number of connections on our network.”

Wondering where you should invest $1,000 right now?

When investing expert Scott Phillips has a stock tip, it can pay to listen. After all, the flagship Motley Fool Share Advisor newsletter he has run for more than eight years has provided thousands of paying members with stock picks that have doubled, tripled or even more.*

Scott just revealed what he believes could be the five best ASX stocks for investors to buy right now. These stocks are trading at near dirt-cheap prices and Scott thinks they could be great buys right now.

*Returns as of August 16th 2021

James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. owns shares of Aussie Broadband Limited. The Motley Fool Australia owns shares of and has recommended Kogan.com ltd and Telstra Limited. The Motley Fool Australia has recommended Aussie Broadband Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Gainers