It's been a positive day so far this Thursday for the S&P/ASX 200 Index (ASX: XJO). The ASX 200 is up a pleasing 0.5% or so as it currently stands. But it's been an even better day for the TPG Telecom Ltd (ASX: TPG) share price thus far.
TPG shares are rising robustly today. This ASX 200 telco is currently up 3.5% at $6.06 a share, well outperforming the broader market. So what's going on with TPG that might be eliciting this share price reaction today?
Well, it could be the result of a statement TPG put out this morning. TPG and its telco peer Telstra Corporation Ltd (ASX: TLS) are currently involved in a tussle with rival Optus. Back in February, Telstra and TPG surprised investors by announcing a partnership.
This will see TPG gain access to roughly 3,700 of Telstra's mobile network assets in regional and suburban areas, resulting in the company boosting its 4G coverage from 96% to 98.8% of the Australian population. In return, Telstra is expecting to bank an extra $1.6-$1.8 billion in revenues over the next decade.
TPG share price climbs as telco bites back
But TPG and Telstra rival Optus is not happy about this tie-up. Last month, the Singaporean telco put out a press release calling on the Australian Competition and Consumer Commission (ACCC) to reconsider the deal.
It stated that if the arrangement were to proceed, it would "lead to a loss of competition and material consumer and public detriment… [and] 'locking' competition out of the regional market and eliminating choice in regional Australia".
Well, today, TPG has exercised its right of reply. According to reporting in The Australian, TPG has issued a rebuttal. It described Optus' comments as "scaremongering" and stated they were based on "factual errors".
Here is some of what TPG executive James Rickards went on to say:
Contrary to the assertions of Optus, this is not a merger… To suggest otherwise is an attempt to mislead the public, industry and key stakeholders in the hope of creating controversy where none exists.
This is an infrastructure sharing agreement in the interests of all Australians... Similarly, statements regarding the arrangements for pooling of spectrum in the shared network have seemingly been twisted intentionally.
So perhaps investors have been comforted by this defiant statement from TPG today. Whatever the reason, it's certainly been a pleasing day for the telco.
At the current TPG share price, this ASX 200 telco has a market capitalisation of $10.97 billion, with a dividend yield of 2.83%.
