Earlier this month ABB announced the addition of a likely ~+26k users in 3Q-23 (seasonally slower period) or 100k+ annually off a larger base. The group now holds ~7.5% of market share in the group’s markets, while its growing +1% annually of the total network and ultra-high speed connections share is running hottest for the group, importantly where the best margin and savings sit.
ABB had its own regulatory issue in May after the ACCC rejected a new NBN wholesale pricing plan which would’ve reduced the cost burden on internet service providers. However, there was no challenge to the ultra-high speed tiers where ABB has a significant skew of customers relative to their overall market share. While this decision further delays a potential margin improvement for Aussie Broadband, as we said at the time we now suspect the NBN will focus on pushing through reduced costs for ultra-fast speeds.
- We like this $700mn telco at current levels believing its cheap for their likely growth
MM remains long & bullish toward ABB around $3
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