The Aussie Broadband Ltd (ASX: ABB) share price is a top performer on Monday. It comes after the company announced a strategic fibre swap deal to expand its geographic reach.
Shares in the telecommunications company were trading 9.3% higher in early trade to a new high of $4.70. At the time of writing, Aussie Broadband shares have retreated to $4.60, up 6.98%.
Aussie Broadband share price surges on fibre swap partnership
Aussie Broadband announced a 10-year deal with VicTrack (Victorian Rail Track Pty Ltd). The deal is to swap access to their respective fibre networks.
Under the swap agreement, VicTrack will provide Aussie Broadband access to its fibre network throughout Victoria.
In return, Aussie Broadband will provide access to its fibre network throughout Victoria. It will also construct access for VicTrack to a number of its NBN POIs (points of interconnect).
Aussie Broadband will pay for the cost of the initial VicTrack POI connections, estimated to be $1.4 million.
The company said that the agreement will "significantly increase the geographic reach of Aussie Broadband's fibre network, especially into regional Victoria."
Further, it will enable the rollout of its own business fibre services into regional areas. That includes Traralgon, Morwell, Warragul, Pakenham, Geelong, Ballarat, Bendigo, and Warrnambool. The service will provide speeds of up to 100G.
Another benefit of the swap agreement is that it will free up capital expenditure originally planned for Victoria. Instead, the company will allocate those funds to "expand the network in other states."
Management commentary
Aussie Broadband managing director Phillip Britt welcomed the partnership:
Smart partnerships like this one with VicTrack enable us to not only expand our network beyond what was originally planned, but also frees up capital to improve our reach in other states.
This is a win for Aussie Broadband, a win for VicTrack and most importantly, a win for our customers and their access to high speed, quality internet connections.
A breakthrough year for the Aussie Broadband share price
The Aussie Broadband share price is up 130% year to date.
It is fast approaching the 500% mark from its listing price of just $1 back in October 2020.
