By Jenny Ruth
Thursday 10th December 2009
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Broking firm McDouall Stuart says it likes the Team Talk business model "with its few direct competitors, recurring monthly revenue streams, solid earnings and strong cash generation."
"Team Talk has produced a strong 20 cents per share fully-imputed dividend in each of the last three years and is forecasting to pay the same in 2010 (the year ending June)," McDouall Stuart says.
"At Team Talk's current share price of $2.30, this equates to a cash yield of 8.7% and a gross yield of 13%."
The only competitor of scale to Team Talk's original mobile radio business is Kordia which has achieved only limited penetration, it says.
The Araneo high-speed wireless broadband business is still in start-up phase and its growth appears limited more by a lack of skilled installers than a lack of business opportunities, McDouall Stuart says.
Mobile data is another embryonic Team Talk business.
The 67%-owned CityLink division provides high-speed broadband and ancillary services on fibre-optic networks, mainly around the Wellington and Auckland CBDs. "While there are a number of potential competitors, CityLink is the only owner of dark fibre (unused fibre) in Auckland and
Wellington which chooses to serve at an individual customer level. It operates on a scale that larger fibre providers are not interested in."
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