Investing in 5G stocks
It’s positioned to change the world, but the process may take decades.
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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.
What ETFs track the 5G category?
The following ETFs offer exposure to 5G semiconductors, telecom chip and gear makers, cloud computing services, satellite companies and more.
- 5G Networks Ltd (5G)
- TPG Telecom Ltd (TPG)
- Telstra Corporation Ltd (TLS)
- NetComm Wireless Limited (NTC)
- iShares Global Telecom ETF (IXP)
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: Share trading can be financially risky and the value of your investment can go down as well as up. “Standard brokerage” fee is the cost to trade $1,000 or less of ASX-listed shares and ETFs without any qualifications or special eligibility. If ASX shares aren’t available, the fee shown is for US shares. Where both CHESS sponsored and custodian shares are offered, we display the cheapest option.
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.
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