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What Is 5G And Why Everybody is Talking About It?

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by Gavin in Blog
December 11, 2019 0 comments
what's 5G

The term “5G” refers to the fifth generation of wireless technology that enters the telecom market to revolutionize the way we live. Its predecessor, the 4G technology, already changed the way people lived by introducing the possibility of live streaming high-quality videos and watch movies in high resolution from the comfort of your smartphone.

Now, 5G is promising to take things to a whole new level by incorporating two crucial developments: URLLC (Ultra-Reliable and Low Latency Communications) and mMTC (massive Machine Type Communications).

What’s So Cool About These Two 5G Features?

5g enables self driving technology

URLLC is no less than a closer step towards self-driving cars and enhanced artificial intelligence (AI), as this 5G feature allows that networks and devices communicate instantly with little to no interruptions, which could lead to, in combination with AI technologies, the possibility that vehicles can communicate within each other to safely drive without human assistance.

On the other hand, mMTC reduces the chance of being out of signal in a crowded space, as this 5G feature permits a higher density of devices connected within a certain distance without affecting the reliability or speed of the network.

As you can see, 5G is more than just a faster internet connection when it comes to assessing the potential impact of the incorporation of this technology to the marketplace and we might just be seeing the tip of the iceberg.

Who Benefits the Most from the Global Implementation of 5G?

industries that benefit from 5g

First of all, major telecom companies are obviously going to benefit from increased data consumption and the initial high prices they will charge for 5G data plans during the introduction phase. Nevertheless, as time passes, the widespread adoption of the technology will end up pushing data rates down, just as it has happened in the past.

Verizon (VZ) and AT&T (T) have both performed well this year as you can see in the charts below. They also pay healthy dividends at 4.03% and 5.36% respectively.

I love using these two as part of a Wheel Strategy where you get paid a healthy dividend during any periods you are forced to hold the stock.

On the other hand, manufacturers of 5G-capable network infrastructure and equipment are surely going to see their revenues pumped by the massive demand for these products coming from telecom companies around the world.

Some stocks to consider here include Xilinx (XLNK), Qualcomm (QCOM), Crown Castle (CCI), Broadcom (AVGO) and Intel (INTC).

Those are perhaps the traditionally thought-of companies, but what about those that rely on fast and reliable internet to provide their services?

We can go further in this sense to include companies and services such as Amazon, YouTube, Instagram, Netflix, Disney+, and other major players in the streaming industry that will surely benefit from increased speeds, especially considering that this will allow smartphones to be much more reliable when it comes to streaming high-quality videos.

Additionally, companies that provide cloud services and digital storage may also be benefit from the increased traffic their servers will get, which translates into more revenues.

The possibilities for this new technology are endless and there’s a lot of money on the table to be taken by those who invest early on.

Trade safe!

Disclaimer: The information above is for educational purposes only and should not be treated as investment advice. The strategy presented would not be suitable for investors who are not familiar with exchange traded options. Any readers interested in this strategy should do their own research and seek advice from a licensed financial adviser.

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Options Trading 101 - The Ultimate Beginners Guide To Options

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