From the initial launch of 1G in late 1980 to analogically support basic voice communication, connectivity standards have gradually evolved towards digital, wireless technology. The advancements in spectrum usage have massively increased capacity of wireless data usage, leading to the launch of 5G in 2018/2019. This type of next-gen broadband mobility is a critical component of the upcoming cycle of technology innovation which includes Internet of Things, Advanced Display Technologies (including VR), Artificial Intelligence and Autonomous Driving.
5G is a critical component of the innovation wave because it is the most critical block of full connectivity, and a significant advancement compared to the current 4G technology. As the network performance improves dramatically over time, data users will benefit from 10 to 100 times faster speed, lower latency, higher density of connected devices, more broadband capacity, and less energy consumption.
The result is the emergence of a wide variety of potential applications, including smart cities, smart homes, industrial automation, and self-driving cars. For example, one fully connected car is essentially a “server on wheels” expected to generate about 25B of data from its sensors. For comparison, one hour of HD video streaming currently generates less than 1GB of data.
Considering that globally, the total amount of people connected to internet is also expected to grow from 3.9Billion in 2018 to 5.3Billion by 2023, the increase in data usage from connected devices is expected to surpass the network’s maximum capacity around 2028, when a more powerful 6G network will be necessary.
These findings evidence the requirement for data-centric Companies to stay aligned with the current wave of opportunities provided by the Connected Economy. 5G is creating a virtuous cycle where the increase of connection is enabling the use of software which, in turn, require more and more hardware to accommodate more advanced software applications. Therefore, the potential of these innovations cannot be ignored by investors who are focused on long-term growth opportunities, like those offered by the widespread applications depending on 5G innovation.
The 5G network upgrade is still in its initial phase, creating an exciting, multi-year, secular investment cycle that will be largely independent from the economic cycle. The synergies between augmented connectivity, IoT (Internet of Things), and advances in Artificial Intelligence represent a massive opportunity for the Connected Economy, due to the variety of advanced commercial applications which stretch beyond communication services such as mobile video applications.
The information in this article should not be regarded as a description of services provided by Delian Partners SA. The opinions expressed in this article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific security or investment product. It is only intended to provide education about the financial industry. The views reflected in this article are subject to change at any time without notice.
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