5G Infrastructure Investments

Mon, 21 Sep 2020 08:04:43 +0000

No matter who wins the 2020 presidential election, federal spending on infrastructure is likely to increase. 5G infrastructure investments will be part of that. Much has been made of bridges, highways, and airports needing repairs, but a competitive America will need high-speed internet communications and that will come from 5G networks. Which 5G infrastructure investments should you look for as you choose profitable investments?

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What Is 5G?

As wireless networks have improved over the years, they have been built to progressively more rigorous standards. So far we have seen 1G, 2G, 3G, and 4G networks. The next one being developed and tested meets the 5G standard. The point of a 5G network is that it will process lots more information a lot faster and allow us to connect the “internet of things” that involves machines, devices, and objects as well as human users.
The characteristics of 5G technologies will be peak data transfers in the multi-gigabyte range, exceptionally low latency, increased reliability, better availability, a uniform experience among all users, and a huge network capacity. This will improve everyone’s user experience and bring entirely new industries into the realm of the wireless internet.

Who Is Involved in 5G?

If you watch the news at all, you will have seen that the Chinese company, Huawei, want to equip countries across the globe with 5G networks. You will also have noticed that many nations want nothing to do with a company that has close ties to the Chinese government and intelligence services. 5G networks will have the capacity to dig deep into the data available in nations across the world and funnel it back to China. So, who is involved in 5G besides the Chinese?

Western 5G Leaders

The leading 5G providers in the West will be Ericsson, Nokia, and Qualcomm. Investopedia offers a nice review of these three companies and their 5G services.

Ericsson

Telefonaktiebolaget LM Ericsson is headquartered in Sweden and trades on NASDAQ as ERIC. The company has a $25 billion market cap and has gone from $9 a share to $11 a share despite the pandemic. Their dividend yield is 0.67%. They are a leading 5G developer, working with mobile operators across the world including Verizon, AT&T, SKM in Korea, and CHL in China. They have been doing real-world testing with all of these operators. Unlike with Huawei, nations across the world are not worried about the Swedes sending data to their intelligence service!

Nokia

Nokia Corporation is headquartered in Finland and trades on the New York Stock Exchange as NOK. It has a market cap of $18.5 billion and trades at $4 a share which is where it starts the year. Their dividend yield is 2.74%. Their 5G network is being actively tested in Germany by Deutsche Telekom AG, in Japan by NTT, in China by China Mobile, and by Verizon in the USA. Nokia is planning a full rollout in the next few years. As with Ericsson, no one is especially concerned about the Fins stealing data and feeding it to their intelligence services.

Qualcomm

Qualcomm is an American company that trades on NASDAQ as QCOM. It has an $81 billion market cap and its stock has gone from $88 a share to $110 a share this year despite the pandemic and recession. Besides developing wireless communication technologies, Qualcomm develops and sells integrated circuits and software for mobile devices and wireless networks. The Qualcomm strategy for 5G is to develop a method that allows users to jump from 4G to 5G to any network seamlessly.