RE: 200P1 Jul 2023 19:55
As I said previously it, isn't just BT under the cosh, the Telecom sector in general are being targeted to search out weakness. The only Telecom company I can think of that's outperforming is Deutsche Telekom, and that's because of their share of T-Mobile in the US. Why is big money chasing Telecom infrastructure? Could it be because of the forecast earnings from IOT in the future, or maybe the fact that this upgrade cycle will be the last for generations and Networks will print money year in, year out, once completed without further massive capex?
One of the narratives, used to justify the low valuations of Telecom companies, is the Return On Capital Employed, but I don't see any further major upgrade cycles once the current ones are finished, so Capex should drop to a trickle once everyone's on Fibre, and 5G rollout's completed; With 5G there'll probably be many more small cells added over time, but nothing on the scale of the current transformation, and they'll be targeted to provide extra bandwidth where needed.
What about 6G though, wont that be the next upgrade cycle the Telecom companies will have to invest in? I don't see that myself; The 6G narrative focuses on the higher frequencies to provide much larger bandwidths to many more people, but those higher frequencies are heavily attenuated by the atmosphere and wont penetrate brick walls, so are only useful in stadiums, shopping centers, Train stations, etc, so more like WiFi than mobile. Many of the 6G applications, using lower frequencies, will be served by the current 5G Bands so wont need any further upgrades to the cellular network.
As I've said on many occasions, I'll just keep topping up as dividends roll in and the price is low, because I don't believe the negative narratives the market is telegraphing. It's up to everyone to do their own research, all this is just my personal opinion.
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