2 Stocks To Benefit From The Rise Of 5G
Updated: Jul 24, 2019
It’s complicated, expensive and not without a few hurdles, but it’s clear that the race to 5G has begun.
When the first 5G service was launched in South Korea in April 2019, over 260,000 people signed up in the first month. With speeds up to 100 times faster than 4G, it’s easy to see why.
Now, 5G services are live in 23 US cities, with a further 14 to be added shortly. With 224 operators in 88 countries actively researching 5G, it’s a great opportunity for investors to follow suit.
So, if this really is a race, who is competing?
In 2018, Ericsson (NASDAQ: ERIC) made significant changes to their business strategy. By cutting costs and concentrating on their core-business, Ericsson was able to regain profitability.
With 49,000 patents and increasing R&D investments, Ericsson is focused on the future of 5G and the Internet of Things (IoT) as a whole. Ericsson has 24 publicly announced 5G contracts and unlike competitors, the company can already support 5G services on their 2015 Ericsson Radio Systems.
Their biggest threat comes from Huawei. However, controversy regarding Huawei’s security only strengthens Ericsson’s position in the market.
These new 5G services that are rolling out will need network providers, and who better to provide than the market leader Verizon (NYSE: VZ)?
Verizon has been one of the earliest adopters of 5G and, as of mid-2019, its service is available in 4 major cities.
What makes Verizon stand out amongst competitors is their potential for growth. In Q1 2019, Verizon saw revenue grow 1.1% from this time last year and, more specifically, they saw a 4.4% growth in wireless service revenue.
In comparison, Verizon’s largest competitor, AT&T (NYSE: T), saw a decrease in revenue and only a 2.9% increase in wireless service revenue – and they have 5G available in 19 major cities.
With Verizon’s plan to have 5G available in 30 cities by the end of 2019, it’s clear that they have a lot to gain from this new technology.
MyWallSt operates a full disclosure policy. MyWallSt staff currently hold long positions in Ericsson. Read our full disclosure policy here.