Search by ticker code:
Generic filters

Can 5G Mobile Save The Telstra (TLS) Share Price?

Is it possible that 5G mobile will save the Telstra Corporation Ltd (ASX: TLS) share price?

Telstra is Australia’s largest and oldest telecommunications business, having built the first telegraph line in 1854. Today, it provides more than 17 million retail mobile services, nearly 5 million retail fixed voice services (e.g. home phones) and 3.6 million broadband services.

Can 5G save the Telstra share price?

The Australian Financial Review is reporting that Telstra customers will be able to buy the first 5G-ready phones in stores by the end of June. Telstra has signed deals with multiple smartphone manufacturers to get exclusive access to their first 5G-ready phones.

Telstra currently has more than 200 5G mobile base stations in Australia, which are located across all of the capital cities as well as Launceston, Toowoomba and the Gold Coast, but not throughout the rest of the country just yet.

Telstra’s CEO Andrew Penn called 2019 the year of 5G at the Consumer Electronics Show (CES) in Las Vegas. But, analysts are unsure if 2019 will also be the year of recovery for the Telstra share price.

The AFR quoted Mr Penn saying: “As a world leader in the testing and development of 5G, we have been working closely with numerous global manufacturing and industry partners to make this revolutionary technology real-world ready.”

Telecommunications consultant Paul Budde told the AFR the first 5G phones would not represent a major advance. It won’t be until the 26 GHz band comes online that the true power of 5G will be felt — and the auction isn’t until 2020. Initially, consumers will just get access to faster internet speeds.

However, all of the exciting technology that the future promises, like automated cars, fully-connected homes and talking fridges, will rely on the full-speed 5G network.

Will Australian Consumers Pay More For 5G?

Telstra management is hoping that the faster speeds and better technology of 5G will encourage consumers to pay more, but no details about 5G prices have been released. According to Telstra’s FY18 report, the average revenue per user (including paying off a phone) was $58.

I think a valid question is, will Australian household budgets be able to stretch to pay materially higher phone bills for technology that arguably we don’t need? The 4G speeds already seem good enough to do almost anything a user could want like watching Netflix, looking at Instagram or… reading fantastic investing articles on Rask Media!

Is It Time To Buy Telstra Shares?

The market will usually only increase the value of a share price if the earnings/profits are growing — and if Telstra’s revenue can’t grow materially its earnings may not budge materially earlier.

Competition is important too. TPG Telecom Ltd (ASX: TPM), Optus and Vodafone are sure to challenge Telstra in the race for 5G, as they have done with 4G.

As Rask Media’s Owen Raszkiewicz wrote in this in-depth analysis of Telstra’s valuation, there may be a better price to pay for the telco’s shares, and there other shares to consider.

In fact, one of Telstra’s competitors could turn out to be a more reliable investment in 2019. Our analyst provides his thoughts on the telco in the free report below.

[ls_content_block id=”14945″ para=”paragraphs”]

FREE & NEW: Our Complete Passive Income Strategy

With interest rates UP, now is one of the best times to start earning passive income from a portfolio. Imagine earning 4%, 5% -- or more -- in dividend passive income from the best shares, LICs, or ETFs... it's like free money credited to your bank account.

So how do the best investors do it?

Whether you have $2,000 or $2,000,000, our Chief Investment Analyst Owen Rask has just released his brand new ASX Passive Income Report. Featuring the best dividend ETFs, LICs, funds and shares, this report cannot be missed by anyone wanting passive income in 2022 and 2023.

You can INSTANTLY access Owen's report -- or get it emailed to you -- for FREE by CLICKING HERE NOW or the button below.

Unsubscribe anytime. Read our TermsFinancial Services GuidePrivacy Policy. We’ll never sell your email address. Our company is Australian owned.

Information warning: The information on this website is published by The Rask Group Pty Ltd (ABN: 36 622 810 995) is limited to factual information or (at most) general financial advice only. That means, the information and advice does not take into account your objectives, financial situation or needs. It is not specific to you, your needs, goals or objectives. Because of that, you should consider if the advice is appropriate to you and your needs, before acting on the information. If you don’t know what your needs are, you should consult a trusted and licensed financial adviser who can provide you with personal financial product advice. In addition, you should obtain and read the product disclosure statement (PDS) before making a decision to acquire a financial product. Please read our Terms and Conditions and Financial Services Guide before using this website. The Rask Group Pty Ltd is a Corporate Authorised Representative (#1280930) of AFSL #383169.