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The world is abuzz with talk of 5G technology — what it is, how it works and how it has the potential to impact almost everything we do. But the network will take many years to update and not all the companies in this space will survive the trek to full implementation. Here's what Australian investors should know before diving into 5G stocks.
What is 5G?
5G is the fifth generation of mobile networks. It’s the next step in the evolution of how we transmit data and is made possible by improvements in antenna design, cell towers and frequency ranges.
The technology is intended to deliver faster data speeds, increased bandwidth and a more reliable network. But as it stands, much of the world still operates on 5G’s predecessor: 4G LTE. And that’s because the process of upgrading to 5G is a tedious and time-consuming one: New cell sites must be built and radios, cell towers and networks will need updating.
The fifth-generation mobile network began rolling out to US cities in 2018. Today, AT&T, T-Mobile and Verizon have all launched 5G networks in select cities, with T-Mobile leading the charge offering its 5G network to 250 million. Once live, any device that connects to a 5G network can access more bandwidth, quicker data transmission and more stable connectivity.
What are 5G stocks?
5G stocks are stocks from companies that produce the hardware and software that makes 5G technology possible. These include a mix of network service operators and hardware manufacturers.
Why invest in 5G stocks?
5G technology is taking off in a big way. GSMA reports that by 2024, the technology will represent a $US 13.1 billion increase in global GDP — a figure that’s expected to swell to $US 565 billion by 2034. And Qualcomm believes the global expansion of 5G will generate up to 22.3 million jobs by 2035. This technology isn’t so much a question of if, but when.
With 5G already rolling out across major carriers in the US, it’s really only a matter of time before the technology becomes a cornerstone of modern lives around the world — Australia included.
And beyond the obvious perk of a speedier mobile connection, 5G is expected to have a hand in all sorts of technological advancements, further fueling its growth and market impact. This network will help speed the evolution of autonomous vehicles, VR technology, telemedicine, remote surgery and so much more. Its applications are seemingly endless and implementation is already underway.
Risks of investing in 5G
At this point, 5G feels like nothing short of a certainty — so what’s the catch? Well, revamping a global mobile network isn’t easy. It requires money, cooperation and most of all, time.
The process of getting 5G off the ground will take many years. And unanticipated obstacles could bog down the process in the interim, including a new legislature that controls or limits the applications of the technology.
The technology’s newness is also a contributing factor for investors, as it’s difficult to know which companies will make it in the long run — and the implementation of 5G is expected to be a very long run.
Compare 5G stocks
There are numerous options for Australians ready to invest in 5G stocks.
Company summary
Telstra Group Limited engages in the provision of telecommunications and information services to businesses, governments, and individuals in Australia and internationally. It operates through four segments: Telstra Consumer and Small Business, Telstra Enterprise, Networks and IT, and Telstra InfraCo. The company offers telecommunication, media and technology products and services to consumer and business customers using mobile and fixed network technologies, as well as operates call centers, retail stores, a dealership network, digital channels, distribution systems and Telstra Plus customer loyalty program in Australia. It also provides network capacity and management, unified communications, cloud, security, industry solutions, integrated and monitoring services to government and large enterprise and business customers; wholesale services, including voice and data; and telecommunication products and services to other carriers, carriage service providers, and internet service providers, as well as builds and manages digital platforms. In addition, the company operates the fixed passive network infrastructure, including data centers, exchanges, poles, ducts, pits and pipes, and fiber network; provides wholesale customers with access to network infrastructure; provides long-term access to components of infrastructure under the infrastructure services agreement; designs and constructs fiber, exchanges, and other infrastructure; and operates the passive and physical mobile tower assets owned or operated by its subsidiary, Amplitel Pty Ltd. The company was formerly known as Telstra Corporation Limited and changed its name to Telstra Group Limited in November 2022. Telstra Group Limited was founded in 1901 and is based in Melbourne, Australia.
TPG Telecom Limited provides telecommunications services to consumer, business, enterprise, and government and wholesale customers in Australia. The company owns and operates fixed and mobile network infrastructure, including fixed voice and data network with approximately 28,000 kilometers of metropolitan and inter-capital fiber networks; and 7,000 submarine cable systems. It also offers enterprise ethernet, cloud, SD-WAN, mobility, internet of things, and answering and messaging services. It provides its services under the Vodafone, TPG, iiNet, AAPT, Internode, Lebara, and felix brands. The company was formerly known as Vodafone Hutchison Australia Limited and changed its name to TPG Telecom Limited in June 2020.TPG Telecom Limited was founded in 1986 and is based in Barangaroo, Australia.
Historical performance
Company summary
5G Networks Limited operates as a licensed telecommunications carrier in Australia and New Zealand. The company offers data connectivity, cloud and data center, and managed services. It provides cloud-based solutions and network services; and operates fiber and wireless infrastructure, management of cloud computing environment, and data center facilities. In addition, the company engages in domain name registrations and renewals, website and email hosting, website development, search engine marketing, and social advertising campaigns for businesses. 5G Networks Limited was incorporated in 2013 and is headquartered in Melbourne, Australia.
Historical performance
Company summary
Aussie Broadband Limited provides telecommunications services to residential and businesses in Australia. It operates in four segments: Residential, Business, Wholesale, and Enterprise & Government. The company offers g fixed broadband, telephony, mobile, and other value add services; and connectivity, voice, managed network, security, cloud, and support services. It also provides a range of other telecommunications services, including voice over internet protocol (VoIP), mobile plans and headsets, and entertainment bundles to residential, small business, and enterprise customers. Aussie Broadband Limited was incorporated in 2008 and is based in Morwell, Australia.
Historical performance
Stock information
Market capitalization: $1042906516
P/E ratio: 41.14
Dividend yield: 0%
Historical performance
What ETFs track the 5G category?
To date, there are no blockchain ETFs listed in Australia.
Compare trading platforms
To invest in 5G stocks, you’ll need a brokerage account. Review your platform options in Australia below.
We update our data regularly, but information can change between updates. Confirm details with the provider you're interested in before making a decision.
Important: The standard brokerage fee displayed is the trade cost for new customers to purchase $1,000 of either Australian or US shares. Where a platform charges different fees for both US and Australian shares we show the lower of the two. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
Bottom line
5G technology is chock-full of potential — both for Australian investors and the world at large. But the technology will take many years to implement, and some companies may not survive the journey.
Review your brokerage account options across multiple platforms to find the account that best meets your needs.
Frequently asked questions
Some do, including AT&T, Marvell, Nokia and Qualcomm.
Shannon Terrell is a writer for Finder who studied communications and English literature at the University of Toronto. On any given day, you can find her researching everything from equine financing and business loans to student debt refinancing and how to start a trust. She loves hot coffee, the smell of fresh books and discovering new ways to save her pennies.
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