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Is 5G Wireless Service the Next Big Thing in Global Telecom?

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The need to remain connected is a human. An era of digitization and technology is essentially built on this need. It is here that telecommunications come to the fore as a necessary utility. The rising demand for technologically superior products has been a silver lining for the telecom space in an otherwise tough environment.

With the U.S. telecom industry continuously evolving, companies in the league are fighting it out to stay abreast of competition. The latest in the league is the upcoming 5G wireless technology.

According to a study commissioned by Qualcomm, fifth-generation (5G) wireless technology could result in real global economic growth by $3 trillion cumulatively between 2020 and 2035. A number of industry researchers are of the opinion that 5G network will provide a download speed of 1 Gbps (gigabit per second), which is 200 times the throughput of the currently available standard 4G LTE network.

Ericsson’s report has stated that the number of 5G subscriptions is set to reach the 1 billion worldwide in 2023. By that time the 5G network will cover more than 20% of the global population. Per a report by Strategy Analytics, global 5G smartphone shipments are set to rise from 2 million units in 2019 to 1.5 billion in 2025, reflecting an average annual growth rate of 250%.The 5G category will be the fastest-growing sector of the global smartphone industry for the next decade, said the report.

Earlier ABI Research estimated that 5G network deployment is expected to ramp up after 2020 and its market size may reach $247 billion worldwide by 2025. North America, Asia-Pacific and Western Europe will be the three regions that will pioneer 5G network deployment.

Advantage of 5G

Latency period of 5G data delivery will be in single milliseconds. Further, 5G technology is designed to be more power efficient than any other standard wireless network available these days. Therefore, 5G-enabled mobile devices are likely to last a lot longer than their 3G or 4G counterparts.

Additionally, superfast 5G mobile networks will be of utmost necessity in managing the exponential growth of internet-connected devices, popularly known as Internet of Things (IoT). The U.S. telecom industry has lately emerged as an intensely contested space where success thrives largely on technical superiority, quality of services and scalability. Thus, in order to stay ahead of competitors, existing players need to be constantly on their toes to introduce innovative products.

Major Players

In the United States, all four national telecom operators including Verizon Communications Inc. VZ, AT&T Inc. T, T-Mobile US Inc. TMUS and Sprint Corp. S are gearing up to start full phased 5G deployment from around 2020. Additionally, United States Cellular Corp. USM is also preparing to deploy 5G wireless network. Each of the above-mentioned stocks currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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