Q: why doesn't the whole telecom sector not do great with the rates so high and no completion ?
thx James
thx James
5i Research Answer:
The sector requires a lot of capital spending to upgrade networks, and it is also regulated, so it cannot simply raise prices when it wants. There is some competition in some areas (ie BCE's media division has lots of competition from streaming services). But it also has to do with interest rates. Most telcos have a lot of debt, so there is an immediate financial impact from higher rates. But also, as rates rise, investors look for income alternatives, such as GICs with no risk, and this can pressure shares of dividend-paying companies.