Telstra (ASX:TLS) share price climbs amid rumours the telco plans to take on US giants


The Telstra share price finished in the green today amid speculation it plans to buy a major stake in Fetch TV.

The company’s shares gained 1.56% today and were trading at $3.90 at the market close. In comparison, the  S&P/ASX 200 Index (ASX: XJO) closed 1.2% higher.

Let’s take a look at what might have impacted investor sentiment in the telco today.

Potential new deal

Speculation is mounting Telstra plans to buy a 51% stake in Fetch TV, an independent Australian pay-TV provider offering streaming services via the internet.

According to a report in the Sydney Morning Herald, the telco plans to build a combined platform that can “compete against international companies such as Apple and Google”.

Telstra also holds a 35% stake in pay-TV provider, Foxtel. Fetch TV has coverage in at least 670,000 homes.

Sources told the publication that Telstra and Fetch TV were in advanced talks about a possible deal that could be finalised as soon as the end of March.

Flood assistance

In other news, Telstra has offered $250,000 for communities impacted by the floods in Queensland and New South Wales.

Telstra CEO Andy Penn said in a statement on Friday:

As part of our overall support for flood-affected communities, the Local Flood Grants will provide either cash or technology to the value of up to $10,000 to eligible local organisations.

Our local Telstra teams have been on the ground working around the clock to get communities back online as quickly as possible.

Furthermore, analysts have recently recommended Telstra as a potential dividend share to buy.

As my My Foolish colleague James reported, Morgans predicts a fully franked dividend of 16 cents per share in FY 2022 and FY 2023. The broker has a $4.56 price target on Telstra shares.

The Telstra share price is up 27% over the past 12 months, but shares in the telco have dropped 3% in the past month and are down 6.7% year to date.

For perspective, the benchmark ASX 200 has returned nearly 5% over the past year.

Telstra has a market capitalisation of almost $46 billion based on its current share price.

Source: Read More

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