NBN roll out presents both a risk and an opportunity

NBN roll out presents both a risk and an opportunity. Tim Carleton, Portfolio Manager at Auscap Asset Management says, Expectations for earnings growth appear to be the most subdued in some time. In fact for the first time in a number of years, expectations are for lower earnings growth in FY15 than was actually experienced in FY14. Despite this there are some sectors that are experiencing strong sector wide growth. The telecommunications sector is an example of this. The demand for communication services and data continues to grow quickly with the proliferation of smart devices. This is being reflected in higher revenues and improved profitability. We expect that the revenue pie for all participants continue to outpace broader GDP growth. The rollout of the NBN over the next few years represents both a unique opportunity and a potential risk for most players in the space.