The 3.6GHz auction was in line with expectations although UBS observes regional prices were higher. Telstra won the most, with 143 lots for $386m. Dense Air was a surprise bidder, winning 29 lots. NBNCo was unable to bid except in regional WA.
The licences will begin March 2020. Telstra was able to pick up its full quota of metro holdings and close to its full quota of regional holdings. UBS has assumed Telstra will spend $1bn for 3.6GHz, 900MHz and 26GHz in total and leaves forecasts unchanged.
Neutral rating and $3 target maintained.
Sector: Telecommunication Services.
Target price is $3.00.Current Price is $3.07. Difference: ($0.07) – (brackets indicate current price is over target). If TLS meets the UBS target it will return approximately -2% (excluding dividends, fees and charges – negative figures indicate an expected loss).