Telstra Group (ASX: TLS) shares are trading in the red on Wednesday morning. At the time of writing the stock is down 0.52% to $4.76 a piece.
For the year-to-date, the shares have fallen 2.36%, but the share price is still 18.87% above where it was this time last year.
The telco is a fantastic defensive stock. It seems to perform steadily, regardless of what stage of the economic cycle we're in. This is attractive for investors who want to hedge against potential volatility elsewhere.
The company's financial performance was robust in 2025. Its latest full-year results, released in August, showed stronger underlying growth and financial performance. At the time, Telstra also said it expected its year-on-year growth to continue.
But Telstra shares have been in the spotlight recently. The telco giant underwent a buyback of its shares between late-November to mid-December.
Around the same time, the company hit headlines amid concerns about its calling reliability. A Senate inquiry is reportedly examining cases where Triple Zero calls may have failed, including situations linked to older devices and network/handset software interactions.
And it looks like the two things, alongside an overall contraction of the telco market since late 2025, have softened investor confidence. TradingView data shows 7 out of 11 analysts have a hold rating on Telstra shares, with an average target price of $4.94. This is just 4.16% above the current trading price at the time of writing.
While Telstra shares are a great buy for passive income, and it's possible the shares could resurge after this period of instability, there is another good quality ASX telco stock which I think offers an even better opportunity for investors right now.
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This ASX telco stock is set to leap higher
Superloop Ltd (ASX: SLC) is an Australian-based fixed-line internet service provider. It provides broadband services to consumers and businesses, as well as wholesale solutions to other downstream internet services entities.
Its services include Wi-Fi management, mobile services, and National Broadband Network products. The company owns an extensive fiber network and is also a part-owner of the Indigo subsea cable.
The telco has rapidly expanded in recent years with several large acquisitions in recent years, including Exetel (an internet retailer) in 2021 and Uecomm (a fiber infrastructure) in 2024.
At the time of writing, Superloop shares are down 0.21% for the day to $2.38. For the year-to-date the shares have slumped 6.47%, but the stock is currently 15.22% above where it was this time last year.
The telco's shares follow a very similar pattern to Telstra shares, but analysts are significantly more bullish about Superloop's potential for growth this year.
The team at Jarden recently said the Superloop business is under appreciated by the market. The broker also thinks that the business is best positioned (versus its competitors) to beat current market expectations.
Jarden has a buy rating and $3.40 target price on Superloop shares. TradingView data shows some analysts are even more bullish on the stock. Out of 9 analysts, 8 have a buy or strong buy rating on Superloop, with a maximum price target of $3.75 a piece. That implies the shares could rise another 56.9% over the next 12 months, at the time of writing.
