Ground Control to Major Telcos: Assessing the Impact of LEO sats on TLS & TPG

Research evidence excerpt

Ground Control to Major Telcos: Assessing the Impact of LEO sats on TLS & TPG

Australia | Telecom Services EquityJulyResearch10, 2026

KEY STOCKS FEATURED INCLUDE:Ground Control to Major Telcos: Assessing

TICKER RATING PRICE TARGETthe Impact of LEO sats on TLS & TPG

TLS AU HOLD AUD5.10

We conducted a deep dive into LEO sats direct-to-device (D2D) services. TPG AU HOLD AUD3.80

Our view is D2D services are complementary to terrestrial mobile, and the

two should co-exist for the foreseeable future, given satellite operators still

require access to mobile spectrum and existing terrestrial infrastructure.

KEY CHANGES INCLUDE:

However, TLS’ coverage premium could erode over time if Optus and TPG

can secure favourable agreements with satellite operators. TICKER RATING PRICE TARGET

TLS AU HOLD AUD5.10 (AUD5.40)

Satellites are still inferior to terrestrial networks. Capacity, uplink speeds, indoor penetration, TPG AU HOLD AUD3.80 (AUD3.90)

spectrum and handset compatibility remain key constraints for effective D2D satellite services.

While technology will improve over time, satellite operators will still rely on terrestrial

infrastructure, including fibre backhaul, ground stations and mobile spectrum provided by Figure 1 - Potential timeline for D2D services

telcos. The ACMA also requires satellite operators to partner with a mobile carrier that holds the improvements

relevant spectrum rights. As such, we do not expect LEO sat D2D services to pose a material 2024Year CapabilitySMS Initial commercial D2D launches (Starlink/T-Catalyst

threat to Australian mobile operators, particularly in metro, suburban and major regional areas 2025 SMS + emergency Expansion of NTN standardsMobile,and MNOLynk)

where terrestrial networks should remain far superior.