Vocus Group Ltd (ASX: VOC) announced to the market this morning that it has signed a 5-year deal with Optus to build a 5G network and future technologies.
Vocus is a telecommunications business that operates a network of 21,000km infrastructure cables connecting capital cities and most regional cities in Australia & New Zealand. Vocus owns a number of brands that serves corporate, small business, government and residential customers, some brands include Vocus, Commander, Engin, Dodo and iPrimus.
The new Vocus and Optus deal
Vocus and Optus have renegotiated and executed a 5-year extension of the current ‘Mobile Virtual Network Operator’ via Optus Wholesale which will give access to the Optus 5G network and future technology.
The Vocus brands that are part of the deal include Dodo, iPrimus and Commander, Vocus plans to grow its mobile customer base whilst targeting an increasing market share of Enterprise and Small to Medium sized business segments.
Vocus Group Managing Director & CEO Kevin Russell said: “Our new partnership with Optus gives Vocus security in the knowledge of our access to market-leading future technologies as well as the flexibility to put attractive mobile propositions in market in a timely manner.”
Is Vocus a buy?
Investors don’t seem too impressed with this initially, its share price is down 1.6% along with the overall ASX.
Vocus seems to be over the worst of its recent debt worries, as well as the decline in sentiment due to the NBN. With the Australia Singapore Cable (ASC) fully constructed and data being sold, it may be able to improve its fortunes from here. Indeed, some investors point to the ever-growing demand for data which should be a tailwind for Vocus.
However, data is subject to commodity pricing which is falling in value every year. It could be better to go for growing shares that have complete control of the pricing of their products, have competitive advantages and have more obvious profit tailwinds. For example, the growth shares in the free below report could be worth considering:
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