Evaluating how satellite and AI reshape ANZ telcos; Initiating coverage: Sell TPG/ABB; Buy SLC; Neutral TLS

We initiate coverage on five ANZ telcos: Telstra at Neutral (TP A$5.30, 8.6x FY27 SOTP EV/EBITDA), TPG at Sell (A$3.40, 6.0x FY27E), Spark New Zealand at Neutral (NZ$2.10, 5.5x FY27E), Superloop at Buy (A$3.10, 10x fundamental/15x M&A) and Aussie Broadband at Sell (A$3.90, 5.5x fundamental/10x M&A). The report explores three key debates. First, satellite is a terminal-value risk, not a near-term earnings risk: ANZ telco multiples have de-rated about 8% since April on LEO concerns, yet spectrum sovereignty and domestic regulation substantially insulate Australia. Satellite captures about 6% of fixed broadband versus roughly 1% for the OECD, and Starlink reached 552k connections at Dec-25, up 47% in six months. D2D is currently SMS-centric and lacks indoor penetration, so competitive risks threaten incumbents geographic coverage premiums rather than metropolitan capacity. A -$5 FY29 postpaid ARPU erosion reduces TLS/TPG/SPK EBITDA by 5%/8%/3%. Second, TLS and SPK are best placed for AI c