Could this stock be a big winner from the NBN fibre-to-the-curb expansion plan?

Plans to bring fibre-to-the-curb (FTTC) could deliver a financial windfall for one ASX-listed stock although shareholders in TPG Telecom Ltd (ASX: TPM) won't be thrilled.

| More on:
a woman

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

News that the company rolling out the national broadband network (NBN) will be expanding its fibre-to-the-curb footprint is not only great news to the 1.5 million homes and businesses that will enjoy faster and more reliable internet speeds but it could prove to be a windfall for one ASX company.

I am not talking about Telstra Corporate Ltd (ASX: TLS) or its peers like TPG Telecom Ltd (ASX: TPM) and Vocus Group Ltd (ASX: VOC). Sure, the customers of these telcos will be excited but the earnings challenges facing the sector isn't about to change on the back of this announcement.

The stock that could reap a material financial benefit is broadband equipment developer Netcomm Wireless Ltd (ASX: NTC).

The original plan for the NBN was to connect expensive fibre cables to local exchanges (called nodes) and use existing copper or pay TV cables to connect homes to the internet.

This is a more cost-effective way to deliver fast speed broadband but the poor condition of existing wires and cables has created several headaches for consumers.

This has forced NBN Co Ltd (the company in charge of the NBN) to use fibre all the way to the curb in some areas so that less of the existing wires and cables will be needed to complete the connection. This will certainly mean much faster and dependable broadband to those lucky enough to be in the right suburb.

While Netcomm provides the equipment to connect NBN customers wirelessly to the node, it is also the only authorised supplier of Distribution Point Units (DPUs) and Network Connecting Devices (NDCs) to NBN Co. These are necessary devices for the FTTC rollout.

However, Netcomm has issued an announcement to the ASX stating that it has not received any new orders for DPUs or NDCs to support the latest FTTC deployment.

On the other hand, the company acknowledged that it is "hopeful" that as the rollout progresses, it will receive further orders.

The announcement was enough to get investors thinking. Netcomm's share price jumped 7.7% in late afternoon trade to $1.26, although shares in Telstra is also 1.1% higher at $3.14 and Vocus is 3.5% stronger at $2.40.

TPG Telecom is bucking the trend though and is 0.5% lower at $5.48 when the S&P/ASX 200 (Index:^AXJO) (ASX:XJO) is 0.7% higher.

Investors may be concerned that the expansion of NBN's FTTC footprint will impact on TPG Telecom's plans to deliver fibre connections directly to metro city customers.

If you are looking for other technology stocks that are well placed to outperform, the experts at the Motley Fool have just the thing for you.

They have produced a free report on three stocks that they believe will be the technology disruptors of tomorrow.

Click on the link below to get your free copy of this report.

Motley Fool contributor Brendon Lau owns shares of NetComm Wireless Limited, TPG Telecom Limited, and Vocus Communications Limited. The Motley Fool Australia owns shares of and has recommended Telstra Limited, TPG Telecom Limited, and Vocus Communications Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on ⏸️ Investing

A white and black robot in the form of a human being stands in front of a green graphic holding a laptop and discussing robotics and automation ASX shares
Technology Shares

Joining the revolution: How I'd invest in ASX AI shares right now

Advances in artificial intelligence (AI) could usher in a new industrial revolution. Here’s how you can invest in it.

Read more »

Close up of baby looking puzzled
Retail Shares

What has happened to the Baby Bunting (ASX:BBN) share price this year?

It's been a volatile year so far for the Aussie nursery retailer. We take a closer look

Read more »

woman holds sign saying 'we need change' at climate change protest
ETFs

3 ASX ETFs that invest in companies fighting climate change

If you want to shift some of your investments into more ethical companies, exchange-traded funds can offer a good option

Read more »

a jewellery store attendant stands at a cabinet displaying opulent necklaces and earrings featuring diamonds and precious stones.
⏸️ Investing

The Michael Hill (ASX: MHJ) share price poised for growth

Investors will be keeping an eye on the Michael Hill International Limited (ASX: MHJ) share price today. The keen interest…

Read more »

ASX shares buy unstoppable asx share price represented by man in superman cape pointing skyward
⏸️ Investing

The Atomos (ASX:AMS) share price is up 15% in a week

The Atomos (ASX: AMS) share price has surged 15% this week. Let's look at what's ahead as the company build…

Read more »

Two people in suits arm wrestle on a black and white chess board.
Retail Shares

How does the Temple & Webster (ASX:TPW) share price stack up against Nick Scali (ASX:NCK)?

How does the Temple & Webster (ASX: TPW) share price stack up against rival furniture retailer Nick Scali Limited (ASX:…

Read more »

A medical researcher works on a bichip, indicating share price movement in ASX tech companies
Healthcare Shares

The Aroa (ASX:ARX) share price has surged 60% since its IPO

The Aroa (ASX:ARX) share price has surged 60% since the Polynovo (ASX: PNV) competitor listed on the ASX in July.…

Read more »

asx investor daydreaming about US shares
⏸️ How to Invest

How to buy US shares from Australia right now

If you have been wondering how to buy US shares from Australia to gain exposure from the highly topical market,…

Read more »