Question 1

Is the high valuation for Uniti justified compared to other infrastructure deals?

Accepted Answer

The $3.4 billion offer implies a 24x EBITDA multiple, which is aggressive given the underlying asset risks. While mobile tower deals have reached 32x multiples, broadband infrastructure lacks the same long-term contract certainty and faces a 14% consumer intent to disconnect.

Question 2

How significant is the risk of consumers moving away from fixed broadband?

Accepted Answer

The threat is substantial, with 15% of households in Australia and New Zealand already bypassing fixed broadband for mobile-only connectivity. This trend is expected to accelerate as MNO fixed wireless penetration grows from 6% to over 9% by 2026.

Question 3

What competitive pressures are most likely to impact future growth?

Accepted Answer

NBN Co remains the dominant threat, having grown wholesale connections by 3.7% over FY22. Any potential government debt write-downs for NBN Co will allow for aggressive pricing that smaller altnets cannot match while servicing debt on a 24x EBITDA entry price.

Question 4

Does broadband infrastructure offer the same stability as mobile towers?

Accepted Answer

No, broadband assets carry higher risk due to shorter consumer contracts and higher churn rates. Unlike the long-term leasing certainty found in the tower sector, 14% of surveyed Australians plan to disconnect their home broadband services permanently.

Uniti acquisition - growth not guaranteed

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