But whatever path the telco chooses, the current schedule means that TPG will have to bring its fiber assets to market before Telstra has had a chance to promote its infraco fixed business to potential buyers. I will be investing it.
Telstra's auction of Infraco Fix is highly anticipated in a market where there is significant demand for communications infrastructure assets. Telstra, Optus and TPG sold stakes in their mobile tower businesses for billions of dollars last year, generating corporate profits roughly 30 times the annual profits of those divisions.
The next “big monster”
“Digital infrastructure as an asset class is gaining a lot of attention,” Rutherford said.
“There is a recognition that it is definitely linked to housing and population growth. This infrastructure asset class will continue to grow and continue to be invested in… attracting strong investment and multiples.”
An investment banker last year labeled the contentious Infraco Fix deal as the next “big monster” for the sector, but Telstra is still putting final touches on the process to simplify and separate the business. No schedule has been set.
Telstra passed another hurdle towards the sale of part of Infraco Fix this month when shareholders approved a new restructuring of the company. This will see it split into four new entities split by infrastructure type under a new Telstra holding company to better facilitate external investment in these assets.
Mr Rutherford said that although TPG had decided to monetize Vision independently of Telstra's process, it expected the two deals to increase investor interest in local telecoms assets.
“This is probably something that all the market players at Vision and Telstra will be looking at,” he said.
UBS analyst Lucy Huang said Vision Networks' preliminary valuation would be between $550 million and $935 million based on similar deals overseas, adding that the strategic review The news is “gradually becoming more positive,” he said.
TPG said Vision is on track to post estimated revenues of $100 million in fiscal 2023 and that there is “significant opportunity to provide ultra-fast broadband connectivity to new building developments” going forward.
