Investing in 5G Wireless

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DeepEddy
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Investing in 5G Wireless

Post by DeepEddy » Mon Sep 10, 2018 3:32 pm

My limited understanding of 5G wireless technology is that speeds will rival that of cable broadband. While it is guaranteed that there is a lot of marketing hype around this, the claims seems legitimate in the higher frequency spectrums. This is potentially a massive game changer - no more wires for high speed video connections, teleconferencing, etc. Suddenly, the wireless providers control the pipe.

Is anyone in the Boglehead community versed in the wireless business? I would love to hear an impartial view of the potential. Verizon seems like a key player - are there other companies well positioned to profit from 5G?

Wikipedia overview of 5G: https://en.wikipedia.org/wiki/5G

KlangFool
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Re: Investing in 5G Wireless

Post by KlangFool » Mon Sep 10, 2018 3:37 pm

OP,

In any business, you can make more money if you can charge more for your service. So, please tell me, are you paying a lot more or a lot less for your Internet service and/or mobile phone service over the last 5 years? Looking at your own bills and you will know the answer.

KlangFool

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David Jay
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Re: Investing in 5G Wireless

Post by David Jay » Mon Sep 10, 2018 3:38 pm

The consensus at BH is to invest in the market, rather than "guess" what technologies and/or sectors will do well in the future. So picking 5G as an investment strategy will likely not get a lot of support on this board.
Prediction is very difficult, especially about the future - Niels Bohr | To get the "risk premium", you really do have to take the risk - nisiprius

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Toons
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Re: Investing in 5G Wireless

Post by Toons » Mon Sep 10, 2018 3:41 pm

5g will be a game changer
Hop On Board when able.
:D

http://fortune.com/2018/04/12/5g-technology-explained/
"One does not accumulate but eliminate. It is not daily increase but daily decrease. The height of cultivation always runs to simplicity" –Bruce Lee

SlowMovingInvestor
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Re: Investing in 5G Wireless

Post by SlowMovingInvestor » Mon Sep 10, 2018 3:43 pm

According to the WSJ today, Chinese companies such as Huawei are dominating 5G right now.

https://www.wsj.com/articles/the-5g-rac ... 1536516373

mptfan
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Re: Investing in 5G Wireless

Post by mptfan » Mon Sep 10, 2018 3:44 pm

David Jay wrote:
Mon Sep 10, 2018 3:38 pm
The consensus at BH is to invest in the market, rather than "guess" what technologies and/or sectors will do well in the future.
Unless of course you are referring to the bond market, in which case some Bogleheads recommend avoiding all bonds except treasuries.
:oops:

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serbeer
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Re: Investing in 5G Wireless

Post by serbeer » Mon Sep 10, 2018 3:47 pm

There may be unusual factors that impede the rollout of this technology:
https://techcrunch.com/2018/09/10/bay-a ... -concerns/

HEDGEFUNDIE
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Re: Investing in 5G Wireless

Post by HEDGEFUNDIE » Mon Sep 10, 2018 3:48 pm

KlangFool wrote:
Mon Sep 10, 2018 3:37 pm
OP,

In any business, you can make more money if you can charge more for your service. So, please tell me, are you paying a lot more or a lot less for your Internet service and/or mobile phone service over the last 5 years? Looking at your own bills and you will know the answer.

KlangFool
Service providers may not be able to charge more, but that’s not the extent of 5G impact. You also have to consider more usage of high bandwidth apps. So I would think the content providers like Netflix are very well positioned to benefit. Also this is why you are seeing pure SPs moving to acquire content providers (AT&T & Time Warner, Comcast & NBCUniversal).

alex_686
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Re: Investing in 5G Wireless

Post by alex_686 » Mon Sep 10, 2018 3:53 pm

To drag this back to something actionable to the OP.

How do you plan on investing in 5G? I suspect either though the hardware side or the network side. The problem with either approach is the same as investing in any company. While the field may be experiencing, while the company is experiencing high growth, the company's stock probably has a fair amount of that growth already already baked into that price. What you want to do is find a company with a good PEG ratio (price/earnings to growth ratio). Which means you need to estimate what the growth will be and compare that against what the market thinks.

It is a valid strategy for investing in individual stock. The problem, like most investing in individual stocks, is that it is hard and requires some luck. Bogleheads is not really geared toward this type of activity, and I strongly recommend passive investing or active.

That being said, best of luck to you in all of your endeavors and don't let the negativity get you down.

KlangFool
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Re: Investing in 5G Wireless

Post by KlangFool » Mon Sep 10, 2018 3:58 pm

HEDGEFUNDIE wrote:
Mon Sep 10, 2018 3:48 pm
KlangFool wrote:
Mon Sep 10, 2018 3:37 pm
OP,

In any business, you can make more money if you can charge more for your service. So, please tell me, are you paying a lot more or a lot less for your Internet service and/or mobile phone service over the last 5 years? Looking at your own bills and you will know the answer.

KlangFool
Service providers may not be able to charge more, but that’s not the extent of 5G impact. You also have to consider more usage of high bandwidth apps. So I would think the content providers like Netflix are very well positioned to benefit. Also this is why you are seeing pure SPs moving to acquire content providers (AT&T & Time Warner, Comcast & NBCUniversal).
HEDGEFUNDIE,

<<Service providers may not be able to charge more,>>

So, AT&T and Verizon lose money building the 5G network so that FAANG could make more money.

<<Also this is why you are seeing pure SPs moving to acquire content providers (AT&T & Time Warner, Comcast & NBCUniversal).>>

It is obvious to them where the money is. Hint: it is not in the network. So, why would they build the 5G network so that they could lose more money and make FAANG rich?

It costs 10 billion to 20 billion to build the 5G network for each SP. Who is going to pay for this?

KlangFool

HEDGEFUNDIE
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Re: Investing in 5G Wireless

Post by HEDGEFUNDIE » Mon Sep 10, 2018 4:01 pm

KlangFool wrote:
Mon Sep 10, 2018 3:58 pm
HEDGEFUNDIE wrote:
Mon Sep 10, 2018 3:48 pm
KlangFool wrote:
Mon Sep 10, 2018 3:37 pm
OP,

In any business, you can make more money if you can charge more for your service. So, please tell me, are you paying a lot more or a lot less for your Internet service and/or mobile phone service over the last 5 years? Looking at your own bills and you will know the answer.

KlangFool
Service providers may not be able to charge more, but that’s not the extent of 5G impact. You also have to consider more usage of high bandwidth apps. So I would think the content providers like Netflix are very well positioned to benefit. Also this is why you are seeing pure SPs moving to acquire content providers (AT&T & Time Warner, Comcast & NBCUniversal).
HEDGEFUNDIE,

<<Service providers may not be able to charge more,>>

So, AT&T and Verizon lose money building the 5G network so that FAANG could make more money.

<<Also this is why you are seeing pure SPs moving to acquire content providers (AT&T & Time Warner, Comcast & NBCUniversal).>>

It is obvious to them where the money is. Hint: it is not in the network. So, why would they build the 5G network so that they could lose more money and make FAANG rich?

It costs 10 billion to 20 billion to build the 5G network for each SP. Who is going to pay for this?

KlangFool
Last time I checked FAANG had billions of dollars in cash sitting on their balance sheets. And they are doing crazy experiments like stratospheric balloons to beam broadband across Africa.

I would not be surprised if we see them making a stronger move into network infrastructure, if that turns out to be the bottleneck.

alfaspider
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Re: Investing in 5G Wireless

Post by alfaspider » Mon Sep 10, 2018 4:06 pm

serbeer wrote:
Mon Sep 10, 2018 3:47 pm
There may be unusual factors that impede the rollout of this technology:
https://techcrunch.com/2018/09/10/bay-a ... -concerns/
I doubt that this will be a serious issue. Nothing about 5G technology makes it riskier than older cell technologies. One small municipality having a freakout over unscientific fears isn't an indication of broader problems.

KlangFool
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Re: Investing in 5G Wireless

Post by KlangFool » Mon Sep 10, 2018 4:07 pm

HEDGEFUNDIE wrote:
Mon Sep 10, 2018 4:01 pm
KlangFool wrote:
Mon Sep 10, 2018 3:58 pm
HEDGEFUNDIE wrote:
Mon Sep 10, 2018 3:48 pm
KlangFool wrote:
Mon Sep 10, 2018 3:37 pm
OP,

In any business, you can make more money if you can charge more for your service. So, please tell me, are you paying a lot more or a lot less for your Internet service and/or mobile phone service over the last 5 years? Looking at your own bills and you will know the answer.

KlangFool
Service providers may not be able to charge more, but that’s not the extent of 5G impact. You also have to consider more usage of high bandwidth apps. So I would think the content providers like Netflix are very well positioned to benefit. Also this is why you are seeing pure SPs moving to acquire content providers (AT&T & Time Warner, Comcast & NBCUniversal).
HEDGEFUNDIE,

<<Service providers may not be able to charge more,>>

So, AT&T and Verizon lose money building the 5G network so that FAANG could make more money.

<<Also this is why you are seeing pure SPs moving to acquire content providers (AT&T & Time Warner, Comcast & NBCUniversal).>>

It is obvious to them where the money is. Hint: it is not in the network. So, why would they build the 5G network so that they could lose more money and make FAANG rich?

It costs 10 billion to 20 billion to build the 5G network for each SP. Who is going to pay for this?

KlangFool
Last time I checked FAANG had billions of dollars in cash sitting on their balance sheets. And they are doing crazy experiments like stratospheric balloons to beam broadband across Africa.

I would not be surprised if we see them making a stronger move into network infrastructure, if that turns out to be the bottleneck.
HEDGEFUNDIE,

I won't bet on this.

KlangFool

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nisiprius
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Re: Investing in 5G Wireless

Post by nisiprius » Mon Sep 10, 2018 4:08 pm

Even if "5G is a game changer" (whatever that means), it does not mean that it will be easy to identify the companies whose stock will soar as a result of being connected with it.

With a little thought you should be able to come up with many examples of technologies that became extremely important, and companies connected with those technologies whose stock did nothing exceptional, or did very poorly, or collapsed and vanished. In the field of "palmtops," if you remember there even being such a term, Palm Inc. certainly looked like an obvious safe choice to succeed, having first mover advantage and a very successful and popular product. I wanted to give my son and daughter one because they were becoming ubiquitous and looked really useful; my son accepted with gratitude (the spiffy ones cost about $500). My daughter demurred, saying the big company she was working for was rolling out BlackBerries to everybody and Palms wouldn't fit with the corporate standard.

Right. BlackBerries. In the portable email-and-messaging field, Research In Motion (RIM), maker of the BlackBerry, looked like another no-brainer to succeed. In effect it did succeed in a pretty big way, only to fail in an equally big way.

In the personal computer field, it was not at all obvious that Apple would be the big winner, rather than Atari (cheaper, and better-known to gamers), Commodore (also cheaper, with a much better keyboard), Tandy Radio Shack (incredible retail distribution through the existing network of Tandy Radio Shack stores), Osborne (very serious and business-oriented, no video game nonsense)... all of which flopped... or IBM, whose PC was clearly beating Apple, Mac and all. Not that IBM collapsed or lost money, but from inception-of-AAPL in 1980 until to day, it has underperformed the 500 Index fund. While Apple underperformed both IBM and the 500 Index Fund for over 24 years.

Even if your accurate crystal ball showed you a bright future for personal computers, you had to look more than two decades into the future to see Apple as the profitable choice. And you had to pick it out not only from Atari, Commodore, Tandy, Osborne; but also Eagle, Victor, Columbia, Compaq; not only IBM but also other big, established, companies entering the PC market like Digital, Data General, Wang, and Xerox.

The same story could be repeated for telecom circa the late 1990s. Worldcom, Global Crossing... make your own list.

And, worse set, once the general notion that some general technology is about to bloom, it attracts dozens of near-scammers who will claim to be in the business even if the connection is tenuous. It is hard to distinguish the serious participants from the self-promoters. A recent "near-scam" example would be the Long Island Iced Tea Company changing its name to Long Blockchain Company, claiming to be a cryptocurrency company, and claiming (apparently falsely) that it made a huge purchase of cryptocurrency "mining" hardware.
Last edited by nisiprius on Mon Sep 10, 2018 4:13 pm, edited 1 time in total.
Annual income twenty pounds, annual expenditure nineteen nineteen and six, result happiness; Annual income twenty pounds, annual expenditure twenty pounds ought and six, result misery.

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serbeer
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Re: Investing in 5G Wireless

Post by serbeer » Mon Sep 10, 2018 4:13 pm

alfaspider wrote:
Mon Sep 10, 2018 4:06 pm
serbeer wrote:
Mon Sep 10, 2018 3:47 pm
There may be unusual factors that impede the rollout of this technology:
https://techcrunch.com/2018/09/10/bay-a ... -concerns/
I doubt that this will be a serious issue. Nothing about 5G technology makes it riskier than older cell technologies. One small municipality having a freakout over unscientific fears isn't an indication of broader problems.
Not one:
"Blocks on 5G deployments are nothing new for Marin County, where other cities including San Anselmo and Ross have passed similar ordinances designed to thwart 5G expansion efforts over health concerns."

alfaspider
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Re: Investing in 5G Wireless

Post by alfaspider » Mon Sep 10, 2018 4:16 pm

serbeer wrote:
Mon Sep 10, 2018 4:13 pm
alfaspider wrote:
Mon Sep 10, 2018 4:06 pm
serbeer wrote:
Mon Sep 10, 2018 3:47 pm
There may be unusual factors that impede the rollout of this technology:
https://techcrunch.com/2018/09/10/bay-a ... -concerns/
I doubt that this will be a serious issue. Nothing about 5G technology makes it riskier than older cell technologies. One small municipality having a freakout over unscientific fears isn't an indication of broader problems.
Not one:
"Blocks on 5G deployments are nothing new for Marin County, where other cities including San Anselmo and Ross have passed similar ordinances designed to thwart 5G expansion efforts over health concerns."
We are talking Marin county here. Not to denigrate the fine people of Marin, but they aren't the average population when it comes to things like this. If top 20 major city passes such an ordinance, then maybe it's a factor. Even in Marin, they will backtrack once 5g is ubiquitous and everyone starts complaining about the slow internet in Marin compared to elsewhere.

Much agreed that picking a winner in the telecom space is hardly an easy task.

Jags4186
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Re: Investing in 5G Wireless

Post by Jags4186 » Mon Sep 10, 2018 9:00 pm

KlangFool wrote:
Mon Sep 10, 2018 3:58 pm
HEDGEFUNDIE wrote:
Mon Sep 10, 2018 3:48 pm
KlangFool wrote:
Mon Sep 10, 2018 3:37 pm
OP,

In any business, you can make more money if you can charge more for your service. So, please tell me, are you paying a lot more or a lot less for your Internet service and/or mobile phone service over the last 5 years? Looking at your own bills and you will know the answer.

KlangFool
Service providers may not be able to charge more, but that’s not the extent of 5G impact. You also have to consider more usage of high bandwidth apps. So I would think the content providers like Netflix are very well positioned to benefit. Also this is why you are seeing pure SPs moving to acquire content providers (AT&T & Time Warner, Comcast & NBCUniversal).
HEDGEFUNDIE,

<<Service providers may not be able to charge more,>>

So, AT&T and Verizon lose money building the 5G network so that FAANG could make more money.

<<Also this is why you are seeing pure SPs moving to acquire content providers (AT&T & Time Warner, Comcast & NBCUniversal).>>

It is obvious to them where the money is. Hint: it is not in the network. So, why would they build the 5G network so that they could lose more money and make FAANG rich?

It costs 10 billion to 20 billion to build the 5G network for each SP. Who is going to pay for this?

KlangFool
If 5G is as good as advertised they will make money from massively increased subscriptions and additional services offered rather than inreasing the cost of usage. Why pay for cell service and wireline service at home when I can just have one bill for cell and home internet access. Why bother with cable when services like DirecTV Now will become common place with vastly improved user experiences and they are portable.

My family currently spends approximately $1700/yr for cell phone, home internet, DirecTV Now, and Amazon Prime for all of digital needs. Of course this all goes to 4 companies. The wireless companies will figure out how to provide me with all the same services and reduce the cost to $1200-$1500 and they’ll get all of it.

KlangFool
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Re: Investing in 5G Wireless

Post by KlangFool » Mon Sep 10, 2018 9:22 pm

Jags4186 wrote:
Mon Sep 10, 2018 9:00 pm

If 5G is as good as advertised they will make money from massively increased subscriptions and additional services offered rather than inreasing the cost of usage. Why pay for cell service and wireline service at home when I can just have one bill for cell and home internet access. Why bother with cable when services like DirecTV Now will become common place with vastly improved user experiences and they are portable.

My family currently spends approximately $1700/yr for cell phone, home internet, DirecTV Now, and Amazon Prime for all of digital needs. Of course this all goes to 4 companies. The wireless companies will figure out how to provide me with all the same services and reduce the cost to $1200-$1500 and they’ll get all of it.
Jags4186,

You had answered your own questions. You are not willing to pay more for the same bundle of service. So, where is the money to pay for the 5G network build up?

Show me the money!

KlangFool

Dottie57
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Re: Investing in 5G Wireless

Post by Dottie57 » Mon Sep 10, 2018 9:30 pm

The problem for me with cell service is that it doesn’t work for me in my condo. I can make an outbound call on my patio, but not inside. :(

KlangFool
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Re: Investing in 5G Wireless

Post by KlangFool » Mon Sep 10, 2018 9:34 pm

Dottie57 wrote:
Mon Sep 10, 2018 9:30 pm
The problem for me with cell service is that it doesn’t work for me in my condo. I can make an outbound call on my patio, but not inside. :(
Dottie57,

All you have to do to fix the problem is complain to the service provider. For some service providers, they will ship you a small base station that you can connect to your Internet connection at home. Then, you will have perfect coverage at home. It is free. You just need to complain about coverage.

In your case, since you plan to live in this condo forever, it might be a worthwhile effort.

KlangFool

Jags4186
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Re: Investing in 5G Wireless

Post by Jags4186 » Mon Sep 10, 2018 9:39 pm

KlangFool wrote:
Mon Sep 10, 2018 9:22 pm
Jags4186 wrote:
Mon Sep 10, 2018 9:00 pm

If 5G is as good as advertised they will make money from massively increased subscriptions and additional services offered rather than inreasing the cost of usage. Why pay for cell service and wireline service at home when I can just have one bill for cell and home internet access. Why bother with cable when services like DirecTV Now will become common place with vastly improved user experiences and they are portable.

My family currently spends approximately $1700/yr for cell phone, home internet, DirecTV Now, and Amazon Prime for all of digital needs. Of course this all goes to 4 companies. The wireless companies will figure out how to provide me with all the same services and reduce the cost to $1200-$1500 and they’ll get all of it.
Jags4186,

You had answered your own questions. You are not willing to pay more for the same bundle of service. So, where is the money to pay for the 5G network build up?

Show me the money!

KlangFool
I guess my point is, right now the wireless company is only getting $420/yr from us. If they can provide us all of the services we have they can get more of my money at the expense of the competing companies.

Hence why AT&T bought DirecTV. They can now provide cell service and tv service. If they can provide home internet without having to maintain 100,000s of miles of fiber optics underground and worrying about territoires, then they can provide all 3 services to every single person in the country.

KlangFool
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Re: Investing in 5G Wireless

Post by KlangFool » Mon Sep 10, 2018 9:45 pm

Jags4186 wrote:
Mon Sep 10, 2018 9:39 pm
KlangFool wrote:
Mon Sep 10, 2018 9:22 pm
Jags4186 wrote:
Mon Sep 10, 2018 9:00 pm

If 5G is as good as advertised they will make money from massively increased subscriptions and additional services offered rather than inreasing the cost of usage. Why pay for cell service and wireline service at home when I can just have one bill for cell and home internet access. Why bother with cable when services like DirecTV Now will become common place with vastly improved user experiences and they are portable.

My family currently spends approximately $1700/yr for cell phone, home internet, DirecTV Now, and Amazon Prime for all of digital needs. Of course this all goes to 4 companies. The wireless companies will figure out how to provide me with all the same services and reduce the cost to $1200-$1500 and they’ll get all of it.
Jags4186,

You had answered your own questions. You are not willing to pay more for the same bundle of service. So, where is the money to pay for the 5G network build up?

Show me the money!

KlangFool
I guess my point is, right now the wireless company is only getting $420/yr from us. If they can provide us all of the services we have they can get more of my money at the expense of the competing companies.
Jags4186,

I know what you mean. But. it is cheaper and easier just to buy those companies. Hence, AT&T bought DirecTV. Versus building the 5G network for 20 billion and fight for a smaller piece of the pie.

KlangFool

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CaliJim
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Re: Investing in 5G Wireless

Post by CaliJim » Mon Sep 10, 2018 9:54 pm

Err mah gerd. NO. Just NO!

Diversity is your friend. It is the only free lunch. Buy and hold stock index funds and don't try to be a stock picker.

Index funds outperform active management.
-calijim- | | For more info, click this Wiki

Starfish
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Re: Investing in 5G Wireless

Post by Starfish » Tue Sep 11, 2018 12:11 pm

I do not understand the case for 5G.
It's just infrastructure. Capital intensive and probably not so spectacular return.
Moreover American providers (from cell service to cable) are very expensive and low quality compared with many other countries. I don't think they can be in this position for much longer. Sooner or later prices will drop and probably the profits.
Every time I fly to eastern europe I enter the first store (supermarket, newspapers stand etc) and I buy a SIM for 5E with 10G or data or so (plus plenty of talk time including several hours of international, messages etc). And all of it is at 4G speeds. The internet providers offer speeds of 1G for like 10$/month, and this was since 5-10 years ago. Fiber to home has been common place for long time now.
US market has to follow at some point.

Jags4186
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Re: Investing in 5G Wireless

Post by Jags4186 » Tue Sep 11, 2018 12:35 pm

Starfish wrote:
Tue Sep 11, 2018 12:11 pm
I do not understand the case for 5G.
It's just infrastructure. Capital intensive and probably not so spectacular return.
Moreover American providers (from cell service to cable) are very expensive and low quality compared with many other countries. I don't think they can be in this position for much longer. Sooner or later prices will drop and probably the profits.
Every time I fly to eastern europe I enter the first store (supermarket, newspapers stand etc) and I buy a SIM for 5E with 10G or data or so (plus plenty of talk time including several hours of international, messages etc). And all of it is at 4G speeds. The internet providers offer speeds of 1G for like 10$/month, and this was since 5-10 years ago. Fiber to home has been common place for long time now.
US market has to follow at some point.
1) 5G can replace wireline service. However expensive it is to build out a 5G network should be less expensive than building out and maintaining hundreds of thousands of miles of fiber optics.

2) It’s unfair to compare American wireless and cable carriers to “many other countries” which I assume you mean Europe. Remember, the United States is twice the size with half the population of Europe minus Russia. Yet we expect nearly blanket LTE coverage and fiber optic cables run everywhere. Once you get out of major metropolises in Europe cell service is no where near as good as it is in the US in my experience. As late as 2016 I was still dropping to GPRS data levels in Italy once you got out of the cities.

KlangFool
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Re: Investing in 5G Wireless

Post by KlangFool » Tue Sep 11, 2018 12:56 pm

Jags4186 wrote:
Tue Sep 11, 2018 12:35 pm
Starfish wrote:
Tue Sep 11, 2018 12:11 pm
I do not understand the case for 5G.
It's just infrastructure. Capital intensive and probably not so spectacular return.
Moreover American providers (from cell service to cable) are very expensive and low quality compared with many other countries. I don't think they can be in this position for much longer. Sooner or later prices will drop and probably the profits.
Every time I fly to eastern europe I enter the first store (supermarket, newspapers stand etc) and I buy a SIM for 5E with 10G or data or so (plus plenty of talk time including several hours of international, messages etc). And all of it is at 4G speeds. The internet providers offer speeds of 1G for like 10$/month, and this was since 5-10 years ago. Fiber to home has been common place for long time now.
US market has to follow at some point.
1) 5G can replace wireline service. However expensive it is to build out a 5G network should be less expensive than building out and maintaining hundreds of thousands of miles of fiber optics.

2) It’s unfair to compare American wireless and cable carriers to “many other countries” which I assume you mean Europe. Remember, the United States is twice the size with half the population of Europe minus Russia. Yet we expect nearly blanket LTE coverage and fiber optic cables run everywhere. Once you get out of major metropolises in Europe cell service is no where near as good as it is in the US in my experience. As late as 2016 I was still dropping to GPRS data levels in Italy once you got out of the cities.
Jags4186,

1) Why do you think that 5G will reduce the fiber build out? In fact, 5G will probably drive more Fiber build out.

2) In order to match the wireline speed, how far do you think that 5G signal can travel?

KlangFool

GAAP
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Re: Investing in 5G Wireless

Post by GAAP » Tue Sep 11, 2018 2:01 pm

The Broadband use case for 5G is only one of many -- and arguably a small one. Effective wireline replacement at a reasonable selling price is not likely to have much of a margin, since the capital outlay is significant.

If you really want to learn about 5G, I suggest you start with https://www.lightreading.com/5g.asp for "5G news, analysis and opinion".

Picking a "winner" in 5G comes to down to guessing about successful use cases, providers, manufacturers, etc. -- I work in the field, and wouldn't attempt to do it.

Jags4186
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Re: Investing in 5G Wireless

Post by Jags4186 » Tue Sep 11, 2018 2:06 pm

KlangFool wrote:
Tue Sep 11, 2018 12:56 pm
Jags4186 wrote:
Tue Sep 11, 2018 12:35 pm
Starfish wrote:
Tue Sep 11, 2018 12:11 pm
I do not understand the case for 5G.
It's just infrastructure. Capital intensive and probably not so spectacular return.
Moreover American providers (from cell service to cable) are very expensive and low quality compared with many other countries. I don't think they can be in this position for much longer. Sooner or later prices will drop and probably the profits.
Every time I fly to eastern europe I enter the first store (supermarket, newspapers stand etc) and I buy a SIM for 5E with 10G or data or so (plus plenty of talk time including several hours of international, messages etc). And all of it is at 4G speeds. The internet providers offer speeds of 1G for like 10$/month, and this was since 5-10 years ago. Fiber to home has been common place for long time now.
US market has to follow at some point.
1) 5G can replace wireline service. However expensive it is to build out a 5G network should be less expensive than building out and maintaining hundreds of thousands of miles of fiber optics.

2) It’s unfair to compare American wireless and cable carriers to “many other countries” which I assume you mean Europe. Remember, the United States is twice the size with half the population of Europe minus Russia. Yet we expect nearly blanket LTE coverage and fiber optic cables run everywhere. Once you get out of major metropolises in Europe cell service is no where near as good as it is in the US in my experience. As late as 2016 I was still dropping to GPRS data levels in Italy once you got out of the cities.
Jags4186,

1) Why do you think that 5G will reduce the fiber build out? In fact, 5G will probably drive more Fiber build out.

2) In order to match the wireline speed, how far do you think that 5G signal can travel?

KlangFool
1) Why send fiber underground or on poles to every single home in a neighborhood when you can send it to a single base station that hits perhaps 50-100 homes? Obviously they will retrofit their current towers with 5G as well as add additional smaller base stations around neighborhoods without having to rip up every street.

Of course fiber will still need to be run--these towers and base stations will need infrastructure in order to transmit data, but that's far different then sending out a person for 2 hours to install a box on the outside of my home and then connect it to a pole on the street so I can have FIOS internet that generates them $50/mo. With 5G they can just send me a wifi router that plugs into my electricity, connects wirelessly to the 5G network and then rebroadcasts as a WiFi signal to my house. Oh and that same wireless signal can broadcast streaming TV services as well.

2) All major wireless providers are building 5G networks. 5G is claimed to deliver 1 gbps to users. That's equivalent to the fastest commercially available wireline service today. I can't speak to what it takes to actually achieve this, but I'm sure it will be doable. After all, 4G LTE originally was claimed to deliver 5-12mbps downloads and I regularly see it pumping out 100mbps+ download speeds.

With regards to how to invest in it--I have no idea. Do you invest in the companies making the equipment? Do you invest in the wireless providers? Do you invest in the backbone networks? I have no idea. I just know it's going to happen--it's already basically here.

What will be interesting is how long these standards will last. After all in the last 10 years we've seen 3G networks get deployed, 4G networks get deployed, and now 5G networks get deployed. That's a completely new network every 5 years. I can't imagine spending $25 billion every 5 years is sustainable, but so far it looks like it has been, albeit with massive consolidation of the industry.

KlangFool
Posts: 10664
Joined: Sat Oct 11, 2008 12:35 pm

Re: Investing in 5G Wireless

Post by KlangFool » Tue Sep 11, 2018 2:33 pm

Jags4186 wrote:
Tue Sep 11, 2018 2:06 pm
KlangFool wrote:
Tue Sep 11, 2018 12:56 pm
Jags4186 wrote:
Tue Sep 11, 2018 12:35 pm
Starfish wrote:
Tue Sep 11, 2018 12:11 pm
I do not understand the case for 5G.
It's just infrastructure. Capital intensive and probably not so spectacular return.
Moreover American providers (from cell service to cable) are very expensive and low quality compared with many other countries. I don't think they can be in this position for much longer. Sooner or later prices will drop and probably the profits.
Every time I fly to eastern europe I enter the first store (supermarket, newspapers stand etc) and I buy a SIM for 5E with 10G or data or so (plus plenty of talk time including several hours of international, messages etc). And all of it is at 4G speeds. The internet providers offer speeds of 1G for like 10$/month, and this was since 5-10 years ago. Fiber to home has been common place for long time now.
US market has to follow at some point.
1) 5G can replace wireline service. However expensive it is to build out a 5G network should be less expensive than building out and maintaining hundreds of thousands of miles of fiber optics.

2) It’s unfair to compare American wireless and cable carriers to “many other countries” which I assume you mean Europe. Remember, the United States is twice the size with half the population of Europe minus Russia. Yet we expect nearly blanket LTE coverage and fiber optic cables run everywhere. Once you get out of major metropolises in Europe cell service is no where near as good as it is in the US in my experience. As late as 2016 I was still dropping to GPRS data levels in Italy once you got out of the cities.
Jags4186,

1) Why do you think that 5G will reduce the fiber build out? In fact, 5G will probably drive more Fiber build out.

2) In order to match the wireline speed, how far do you think that 5G signal can travel?

KlangFool
1) Why send fiber underground or on poles to every single home in a neighborhood when you can send it to a single base station that hits perhaps 50-100 homes? Obviously they will retrofit their current towers with 5G as well as add additional smaller base stations around neighborhoods without having to rip up every street.
Jags4186,

If the answer is one base station for every 3 to 5 homes, will you change your mind?

KlangFool

mhalley
Posts: 6303
Joined: Tue Nov 20, 2007 6:02 am

Re: Investing in 5G Wireless

Post by mhalley » Tue Sep 11, 2018 2:41 pm

I'm not advocating this, but a cursory Google search shows multiple ETFs that MIGHT benefit from 5g rollout.

Jags4186
Posts: 2611
Joined: Wed Jun 18, 2014 7:12 pm

Re: Investing in 5G Wireless

Post by Jags4186 » Tue Sep 11, 2018 2:45 pm

KlangFool wrote:
Tue Sep 11, 2018 2:33 pm
Jags4186,

If the answer is one base station for every 3 to 5 homes, will you change your mind?

KlangFool
No--it will still happen. Again, I can't tell you how to make money investing in it, and I can't tell you that 5G will get rid of wireline service in the next 5 years, but the future is wireless everything. One company will invest in the technology and that will force everyone else's hand.

KlangFool
Posts: 10664
Joined: Sat Oct 11, 2008 12:35 pm

Re: Investing in 5G Wireless

Post by KlangFool » Tue Sep 11, 2018 2:47 pm

Jags4186 wrote:
Tue Sep 11, 2018 2:45 pm
KlangFool wrote:
Tue Sep 11, 2018 2:33 pm
Jags4186,

If the answer is one base station for every 3 to 5 homes, will you change your mind?

KlangFool
No--it will still happen. Again, I can't tell you how to make money investing in it, and I can't tell you that 5G will get rid of wireline service in the next 5 years, but the future is wireless everything. One company will invest in the technology and that will force everyone else's hand.
Jags4186,

I hope that you know we had been saying this for 30+ years.

KlangFool

GAAP
Posts: 687
Joined: Fri Apr 08, 2016 12:41 pm

Re: Investing in 5G Wireless

Post by GAAP » Tue Sep 11, 2018 2:51 pm

Jags4186 wrote:
Tue Sep 11, 2018 2:06 pm
1) Why send fiber underground or on poles to every single home in a neighborhood when you can send it to a single base station that hits perhaps 50-100 homes? Obviously they will retrofit their current towers with 5G as well as add additional smaller base stations around neighborhoods without having to rip up every street.

Of course fiber will still need to be run--these towers and base stations will need infrastructure in order to transmit data, but that's far different then sending out a person for 2 hours to install a box on the outside of my home and then connect it to a pole on the street so I can have FIOS internet that generates them $50/mo. With 5G they can just send me a wifi router that plugs into my electricity, connects wirelessly to the 5G network and then rebroadcasts as a WiFi signal to my house. Oh and that same wireless signal can broadcast streaming TV services as well.

2) All major wireless providers are building 5G networks. 5G is claimed to deliver 1 gbps to users. That's equivalent to the fastest commercially available wireline service today. I can't speak to what it takes to actually achieve this, but I'm sure it will be doable. After all, 4G LTE originally was claimed to deliver 5-12mbps downloads and I regularly see it pumping out 100mbps+ download speeds.

With regards to how to invest in it--I have no idea. Do you invest in the companies making the equipment? Do you invest in the wireless providers? Do you invest in the backbone networks? I have no idea. I just know it's going to happen--it's already basically here.

What will be interesting is how long these standards will last. After all in the last 10 years we've seen 3G networks get deployed, 4G networks get deployed, and now 5G networks get deployed. That's a completely new network every 5 years. I can't imagine spending $25 billion every 5 years is sustainable, but so far it looks like it has been, albeit with massive consolidation of the industry.
To provide broadband wireless at the 1Gbps rate you mention, the carriers need a lot of bandwidth which in turn drives them to very high frequencies (the millimeter wave stuff you hear about). Those frequencies attenuate extremely rapidly, measured in meters, not kilometers. The carriers are building out a lot more than just the towers you mention to do this -- as-in every few light poles.

To provide that 100mbps you describe for 4G, carriers are aggregating multiple frequencies, not the one frequency used for the original 4G spec.

There aren't a lot of consumers actually needing speeds in excess of 1Gbps. In fact, any consumer using WiFi isn't going to use all of that potential anyway -- a direct, wired connection would be needed. While 802.11ac in theory can hit 1300Mbps/1.3Gbs, actual maximum speeds are around 200 mbps.

Wireless is a mature industry, with major cost pressures -- for one example, see https://www.investors.com/news/technolo ... -dividend/. The biggest driver for 5G may actually be cost savings, since many of the biggest potential uses have extremely low per-unit revenue potential and extremely high numbers of units required -- think Internet Of Things, for example. 5G is really an evolution, not a revolution.

2G was deployed in the mid to late 1990s, 3G deployments about 10 years later, and 4G deployments around 2010. Current 6G estimated deployment timelines are around 2030-2035.

Jags4186
Posts: 2611
Joined: Wed Jun 18, 2014 7:12 pm

Re: Investing in 5G Wireless

Post by Jags4186 » Tue Sep 11, 2018 2:57 pm

KlangFool wrote:
Tue Sep 11, 2018 2:47 pm
Jags4186 wrote:
Tue Sep 11, 2018 2:45 pm
KlangFool wrote:
Tue Sep 11, 2018 2:33 pm
Jags4186,

If the answer is one base station for every 3 to 5 homes, will you change your mind?

KlangFool
No--it will still happen. Again, I can't tell you how to make money investing in it, and I can't tell you that 5G will get rid of wireline service in the next 5 years, but the future is wireless everything. One company will invest in the technology and that will force everyone else's hand.
Jags4186,

I hope that you know we had been saying this for 30+ years.

KlangFool
Of course but 30 years ago it wasn't possible to stream live HDTV to your pocket Cray supercomputer while on the highway.

Jags4186
Posts: 2611
Joined: Wed Jun 18, 2014 7:12 pm

Re: Investing in 5G Wireless

Post by Jags4186 » Tue Sep 11, 2018 3:02 pm

GAAP wrote:
Tue Sep 11, 2018 2:51 pm
To provide broadband wireless at the 1Gbps rate you mention, the carriers need a lot of bandwidth which in turn drives them to very high frequencies (the millimeter wave stuff you hear about). Those frequencies attenuate extremely rapidly, measured in meters, not kilometers. The carriers are building out a lot more than just the towers you mention to do this -- as-in every few light poles.

To provide that 100mbps you describe for 4G, carriers are aggregating multiple frequencies, not the one frequency used for the original 4G spec.

There aren't a lot of consumers actually needing speeds in excess of 1Gbps. In fact, any consumer using WiFi isn't going to use all of that potential anyway -- a direct, wired connection would be needed. While 802.11ac in theory can hit 1300Mbps/1.3Gbs, actual maximum speeds are around 200 mbps.

Wireless is a mature industry, with major cost pressures -- for one example, see https://www.investors.com/news/technolo ... -dividend/. The biggest driver for 5G may actually be cost savings, since many of the biggest potential uses have extremely low per-unit revenue potential and extremely high numbers of units required -- think Internet Of Things, for example. 5G is really an evolution, not a revolution.

2G was deployed in the mid to late 1990s, 3G deployments about 10 years later, and 4G deployments around 2010. Current 6G estimated deployment timelines are around 2030-2035.
Of course almost no one needs 1gbps. And 5G of course is going to drive cost savings. And 5G may not end up being the end all be all. My argument is that the way for the wireless networks to monetize 5G in a world where the price of cell service is going down is by being able to provide more services to consumers therefore driving up their revenue per user. If the same network can provide cell & home internet & tv service then the wireless providers will turn into the "new" cable companies.

Let's say the average family pays $150/mo for traditional cable & internet, and an additional $100/mo for cell service. If the cell service can offer you everything for $200/mo would you not consider switching to that? The cell company makes $200 instead of $100 and you save $50/mo.

GAAP
Posts: 687
Joined: Fri Apr 08, 2016 12:41 pm

Re: Investing in 5G Wireless

Post by GAAP » Tue Sep 11, 2018 3:19 pm

Jags4186 wrote:
Tue Sep 11, 2018 3:02 pm
Of course almost no one needs 1gbps. And 5G of course is going to drive cost savings. And 5G may not end up being the end all be all. My argument is that the way for the wireless networks to monetize 5G in a world where the price of cell service is going down is by being able to provide more services to consumers therefore driving up their revenue per user. If the same network can provide cell & home internet & tv service then the wireless providers will turn into the "new" cable companies.
I think you need to consider that that likely growth factors for wireless in general and 5G in particular are not consumer based. Where potential consumer use cases currently exist, they are in an already competitive marketplace. If I'm paying $50/month for cable internet, and using Wifi, 5G would have to cost even less to make sense. Sure, the carrier could package other entertainment options -- but the net package would have to be at least equivalent to cable at a competitive price. That doesn't leave a lot of margin to cover the capital investment. Most consumer use cases simply pit the carriers against each other, and potentially against wireline/cable providers.

Some of the 5G goals are related to non-consumer use cases. 10x battery life is really aimed at tiny IOT devices, not smartphones. 5x lower latency isn't even noticeable in the consumer arena. 10x-100x number of connected devices is certainly not consumer, it's IOT again. 1000x data volume per geographical area is aimed at carrier capacity.

Now, if you can figure out -- or even better, invent -- what the next big non-consumer application will be, then you might make some serious money.

LiterallyIronic
Posts: 855
Joined: Sat Dec 05, 2015 10:36 am

Re: Investing in 5G Wireless

Post by LiterallyIronic » Tue Sep 11, 2018 3:21 pm

Jags4186 wrote:
Tue Sep 11, 2018 2:06 pm
2) All major wireless providers are building 5G networks. 5G is claimed to deliver 1 gbps to users. That's equivalent to the fastest commercially available wireline service today. I can't speak to what it takes to actually achieve this, but I'm sure it will be doable. After all, 4G LTE originally was claimed to deliver 5-12mbps downloads and I regularly see it pumping out 100mbps+ download speeds.
Yet 4G is technically defined by the ITU Radiocommunication Sector standards committee as "peak data rates of up to approximately 100 Mbit/s for high mobility such as mobile access and up to approximately 1 Gbit/s for low mobility such as nomadic/local wireless access." (https://en.wikipedia.org/wiki/4G#IMT-Ad ... quirements). We were supposed to get 1Gbps with 4G.
Jags4186 wrote:
Tue Sep 11, 2018 3:02 pm
Let's say the average family pays $150/mo for traditional cable & internet, and an additional $100/mo for cell service. If the cell service can offer you everything for $200/mo would you not consider switching to that? The cell company makes $200 instead of $100 and you save $50/mo.
We pay $40/month for two cell lines and have free Google Fiber, along with no TV/streaming services. $200/month would be outrageous and I'd never pay it.

But to keep the ratios similar, if Company XYZ came along and said, "We'll give you cell service and Internet for $30/month," I'd decline. I like know that if my Internet goes down, I can still make phone calls. Not to mention that I'd expect to have some kind of data cap, which is unacceptable.

randomguy
Posts: 6617
Joined: Wed Sep 17, 2014 9:00 am

Re: Investing in 5G Wireless

Post by randomguy » Tue Sep 11, 2018 3:21 pm

Jags4186 wrote:
Tue Sep 11, 2018 2:57 pm
KlangFool wrote:
Tue Sep 11, 2018 2:47 pm
Jags4186 wrote:
Tue Sep 11, 2018 2:45 pm
KlangFool wrote:
Tue Sep 11, 2018 2:33 pm
Jags4186,

If the answer is one base station for every 3 to 5 homes, will you change your mind?

KlangFool
No--it will still happen. Again, I can't tell you how to make money investing in it, and I can't tell you that 5G will get rid of wireline service in the next 5 years, but the future is wireless everything. One company will invest in the technology and that will force everyone else's hand.
Jags4186,

I hope that you know we had been saying this for 30+ years.

KlangFool
Of course but 30 years ago it wasn't possible to stream live HDTV to your pocket Cray supercomputer while on the highway.
Sure but you could stream ntsc TV to a device in your pocket. HDTV is decade out of date. we are in a 4K world now😁 Historically these infrastructure companies have not been great imvestments. They keep having to spend 10s of billions building networks and the networks dont last long enoigh to amortize out the costs. Maybe this time will be different.

Jags4186
Posts: 2611
Joined: Wed Jun 18, 2014 7:12 pm

Re: Investing in 5G Wireless

Post by Jags4186 » Tue Sep 11, 2018 4:08 pm

I feel like everyone is telling me I’m arguing a different point than I actually am. I have no idea if 5G is going to be a profitably investable technology. But 5G technology will rollout and there will be ways to monetize it. Saying we’ll just stay at 4G levels because no one is going to spend $25 billion to build out a 5G network is something I don’t believe. I offered the bundling of services as one avenue wireless providers will be able to monetize the new networks. I’m sure 5G networks will come into play with autonomous driving cars. I’m sure there will be countless other ways they will try to monetize the new capabilities as well. Some will work, some won’t.

Starfish
Posts: 469
Joined: Wed Aug 15, 2018 6:33 pm

Re: Investing in 5G Wireless

Post by Starfish » Tue Sep 11, 2018 4:39 pm

Jags4186 wrote:
Tue Sep 11, 2018 12:35 pm
Starfish wrote:
Tue Sep 11, 2018 12:11 pm
I do not understand the case for 5G.
It's just infrastructure. Capital intensive and probably not so spectacular return.
Moreover American providers (from cell service to cable) are very expensive and low quality compared with many other countries. I don't think they can be in this position for much longer. Sooner or later prices will drop and probably the profits.
Every time I fly to eastern europe I enter the first store (supermarket, newspapers stand etc) and I buy a SIM for 5E with 10G or data or so (plus plenty of talk time including several hours of international, messages etc). And all of it is at 4G speeds. The internet providers offer speeds of 1G for like 10$/month, and this was since 5-10 years ago. Fiber to home has been common place for long time now.
US market has to follow at some point.
1) 5G can replace wireline service. However expensive it is to build out a 5G network should be less expensive than building out and maintaining hundreds of thousands of miles of fiber optics.

2) It’s unfair to compare American wireless and cable carriers to “many other countries” which I assume you mean Europe. Remember, the United States is twice the size with half the population of Europe minus Russia. Yet we expect nearly blanket LTE coverage and fiber optic cables run everywhere. Once you get out of major metropolises in Europe cell service is no where near as good as it is in the US in my experience. As late as 2016 I was still dropping to GPRS data levels in Italy once you got out of the cities.
1. It could in theory if everything goes right but if competition gets in the prices should only go down.

2. I read some real data where actually the cost does not come from lack of density, but from lack of competition (monopoly) and regulation/nymbism.
In many cities in eastern europe the 90 you could chose between 4 cable companies and a DSL service.
I live in Bay Area wich has 7 milion poeple pretty small area. In 2005-2006, in the middle of a very populated area in Silicon Area I could not get cable and even DSL was right at the edge of covered area. And even nowadays you pay 60$ for 20-30M of data. There is no excuse for that. We are talking about the center of technology in the world in an area with pretty high density.


My point is that there are 2 options here:
A. if the infrastructure becomes easy the competition will get in. If competition gets in prices drop and there is a race to the bottom.
B. in infrastructure is capital intensive than the returns are not spectacular.

I do not see any reason to put more money than allocated by index in this type of industry.

Starfish
Posts: 469
Joined: Wed Aug 15, 2018 6:33 pm

Re: Investing in 5G Wireless

Post by Starfish » Tue Sep 11, 2018 4:58 pm

Jags4186 wrote:
Tue Sep 11, 2018 2:57 pm

Of course but 30 years ago it wasn't possible to stream live HDTV to your pocket Cray supercomputer while on the highway.
But it's ATT/Verizon getting the money, is Netflix, Google, Facebook, Apple. Is the content, not the infrastructure.

rolandtorres
Posts: 86
Joined: Sat Jan 09, 2016 8:44 pm

Re: Investing in 5G Wireless

Post by rolandtorres » Tue Sep 11, 2018 11:38 pm

OP, one investment approach would be less on the networks and more on the suppliers for 5G equipment: Nokia, Ericsson, Qualcomm. In this T-mobile deal, Nokia gets paid no matter how successful or not 5G is as a broadband utility for T-mo

https://finance.yahoo.com/news/nokia-t- ... 16017.html

sco
Posts: 825
Joined: Thu Sep 24, 2015 2:28 pm

Re: Investing in 5G Wireless

Post by sco » Tue Sep 11, 2018 11:50 pm

Not only do you have to figure out if the technology is successful, but you have to figure out who the winners and losers are.

And cable modem speeds?
Not for every individual user at the same time? Similiar claims with 4g. Is it better, sure.. Will apps just get fatter, yes that too.
Are you going to stop watching your home TV and switch to your cell phone? Some may, but some won't.

Whether the infrastructure investment will be worth it, won't be known for a while.

sco
Posts: 825
Joined: Thu Sep 24, 2015 2:28 pm

Re: Investing in 5G Wireless

Post by sco » Tue Sep 11, 2018 11:51 pm

rolandtorres wrote:
Tue Sep 11, 2018 11:38 pm
OP, one investment approach would be less on the networks and more on the suppliers for 5G equipment: Nokia, Ericsson, Qualcomm. In this T-mobile deal, Nokia gets paid no matter how successful or not 5G is as a broadband utility for T-mo

https://finance.yahoo.com/news/nokia-t- ... 16017.html
Or Lucent!

GAAP
Posts: 687
Joined: Fri Apr 08, 2016 12:41 pm

Re: Investing in 5G Wireless

Post by GAAP » Wed Sep 12, 2018 9:27 am

sco wrote:
Tue Sep 11, 2018 11:51 pm
rolandtorres wrote:
Tue Sep 11, 2018 11:38 pm
OP, one investment approach would be less on the networks and more on the suppliers for 5G equipment: Nokia, Ericsson, Qualcomm. In this T-mobile deal, Nokia gets paid no matter how successful or not 5G is as a broadband utility for T-mo

https://finance.yahoo.com/news/nokia-t- ... 16017.html
Or Lucent!
Northern Telecom was one of those can't-miss suppliers a while back...

There are several industry directions that will continue to put pressure on the equipment manufacturers. OpenRAN/OPenVRAN/xRAN will lead to an environment that allows mix and match equipment instead of the single-vendor lockdown that is prevalent today. Combine that with NFV and a whole host of non-traditional software vendors, and the equipment industry does not look that inviting.

User avatar
CaliJim
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Location: California, near the beach

Re: Investing in 5G Wireless

Post by CaliJim » Sat Oct 06, 2018 9:05 pm

many many many (most?) technology sectors have gone though boom bust cycles. timing entry into them is H A R D.

I'm thinking:
airlines
telecoms
web browser sw
search engine companies
pc makers
game console makers
.com....
-calijim- | | For more info, click this Wiki

evestor
Posts: 114
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Re: Investing in 5G Wireless

Post by evestor » Sat Oct 06, 2018 9:41 pm

I'll take the counter point: 5G is incrementalism. Sure it's faster. But it's impact is overrated. It still requires massive buildout and as a result it won't materially change the economics of being in this business.
I guess it's possible someone loses if they wait long enough but I don't see any evidence anyone will do that.
I don't see any materially new scenarios that will be unlocked with 5G.
I don't think any winners or losers will be picked based upon 5G deployments.

As usual it'll be good for users as it is faster and users love speed.

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