5G - The Upcoming Technology And Markets Revolution

Jan. 08, 2019 9:38 AM ETSOXL, SOXX, SMH, USD, VOX, PSI, XSD, IYZ, SOXS, FCOM, XTL, IGN, SSG, PXQ, FTXL, LTL, XTH24 Comments
Mark J. Grant profile picture
Mark J. Grant
6.27K Followers

Summary

  • The new 5G wireless network technology is set to boost the bandwidth, capacity and reliability of cellular broadband.
  • This is not just an advancement in speed but speeds that are so fast that they will totally change connectivity and with that, totally devastate some existing industries, while adding massive revenue growth to the bottom lines of other industries.
  • The entire financial landscape, as well as the technological landscape, is going to be changed because of this new technology.

You never change things by fighting the existing reality. To change something, build a new model that makes the existing model obsolete.

- Buckminster Fuller

I don't think that most people, or institutions, or money managers, have grasped, yet, just what is happening. The new 5G wireless network technology is set to boost the bandwidth, capacity and reliability of cellular broadband. This is not just an advancement in speed but speeds that are so fast that they will totally change connectivity and with that, totally devastate some existing industries, while adding massive revenue growth to the bottom lines of other industries. Think of the light bulb, the locomotive, the internet and the first wireless phone and you will be on the right page.

So, you manage money. You have a portfolio, or portfolios, that you are in charge of running. You know why you bought certain things. You gave very careful consideration as to price and yield and value. Then, one day, the future arrives. Some science fiction fantasy becomes a reality. Let me tell you, you better look at your portfolios again because what was, isn't going to be, for much longer. A new technology is arriving and the entire financial landscape, as well as the technological landscape, is going to be changed, because of this new technology.

Always in motion is the future.

- Yoda

The Trump administration has said that it is seeking to remove hurdles for the faster deployment of the next generation of wireless communications, which is 5G, by imposing Federal regulations over state and local regulations. The Federal Communications Commission Chairman said at a White House summit, that "U.S. leadership in 5G technology is a national imperative for economic growth and competitiveness."

He said that the new 5G networks could be 120 times faster than current networks. "The lag time between a device's request for data and the network's response will be less than one-tenth of what it is today," he said. "Wireless networks that today support 1,000 connected devices per square kilometer could instead support 1 million."

Pay attention here. There seems to be the notion that 5G will only apply to people and their devices. Businesses, in my view, will be even more positively affected, by both the new speeds and the lowered costs, because of them, than individuals. This will be a huge positive, in my opinion, for data storage, where costs are about to significantly decline.

Administration officials said they have high hopes for the technology. The FCC Chairman stated that 5G has the potential to help create 3 million new jobs, $275 billion in private investment, and $500 billion in new economic growth. The FCC Chairman also said that 5G networks will need 800,000 cell sites, mostly small cells no bigger than a backpack, or about four times the existing number of sites.

Think here of one of the winners in the new 5G rollout, the tower companies and the antenna manufacturing companies. Let me also identify another winner for you and these will be the cell phone makers. None of the current mobile phones can support the 5G network or be upgraded to do so. Consequently, the mobile telephone makers will all be out with new 5G cellphones in the foreseeable future, which everyone will have to buy. The chipmakers, network gear suppliers and software companies will also see an upside because of the 5G deployment.

5G technology will also introduce a faster, more intense level of low-latency interconnectivity from human-to-human, machine-to-human and machine-to-machine. It relies on millimeter wave bands (high-band spectrum above 24 GHz) previously considered unusable. To streamline the passage of high-band spectrum waves, small cells and advanced antenna technology are needed to deliver signals across shorter distances.

A technique known as Multiple Input Multiple Output (MIMO), allows for an information stream to be separated into parts and efficiently transmitted through more than one antenna so that it won't be stopped by objects along the way. 5G technology will serve as a platform for the invention of other new, exciting technologies, from self-driving cars and trucks, that can be monitored simultaneously, to remote robots and health care devices that will be able to be operated from distant locations.

Another area that is likely to be affected by 5G is healthcare. Besides doing operations remotely there is the monitoring of patients. Currently, almost all of this is done in hospitals for seriously ill people. Now, with the dazzling speed of 5G, patients can stay at home and be continuously monitored by devices, in real time, which may negatively impact the revenues of hospitals but positively impact the health care companies that provide the services. This could also be a positive for the insurance companies that help to pay for these services.

Let's go further afield, so to speak. Farm equipment will be able to run and be controlled from hundreds of miles away. ATMs can be monitored in real time. Inventory in stores, can be monitored, and items replaced in real time, and by robotic devices. Cars can be produced in much smaller factories, requiring fewer workers, and operated by experts than can oversee multiple factory operations, and all at once. Fleets and logistics will also be impacted along with supply chains as you can monitor, and direct, the entire process in real time.

There are also some significant losers, as 5G is rolled out. Inside your house or office, you are likely to have a small wireless router. This device will provide all of the data for your computers, laptops, phones, tablets and televisions. This means that cable providers, Internet providers, and other industries connected to them, will no longer be needed. "Cutting the cord" will be an easy decision. The future is arriving. You better pause, think, and then react, before it whacks you on top of your head. If you don't get it, they will, so you better move now, before it is too late.

Rational behavior... depends upon a ceaseless flow of data from the environment. It depends upon the power of the individual to predict, with at least a fair success, the outcome of his own actions. To do this, he must be able to predict how the environment will respond to his acts. Sanity, itself, thus hinges on man's ability to predict his immediate, personal future on the basis of information fed him by the environment.
- Alvin Toffler, Future Shock

Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.

This article was written by

Mark J. Grant profile picture
6.27K Followers
Mark J. Grant is the Chief Global Strategist at Colliers Securities, LLC. The highlights of a 48-year career in the financial services industry include positions as President of an investment bank, head of Capital Markets for four investment banks, and serving on the Board of Directors of four investment banks. He has been designated as a Bloomberg Prophet, one of only 15 globally. Mark is one of the longest serving guests on CNBC’s “Squawk Box”, is frequently interviewed on Fox Business and Bloomberg TV, and is regularly quoted in the Wall Street Journal, Barron’s, MarketWatch and other business publications. His commentary, “Out of the Box,” is subscribed to by over 5,000 money managers and financial institutions in more than 46 countries. He is also the author of a book titled “Out of the Box and onto Wall Street.” While Mark’s institutional clients include some of the largest money managers in the world, he also works with high-net worth individual investors. His unique investment strategy is especially useful for people who need yield and monthly cash flows. He employs carefully chosen closed-end funds and exchange traded funds and notes to produce monthly income for his clients, currently he is able to provide yields are 10%+, however current performance is no guarantee of future results. For additional information, email Mark at Markjgrant@Bloomberg.net.

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