Post #23: 5G is coming to you soon(ish) - Heptagon Capital – Production

Right by St Paul’s Cathedral in the heart of London’s City, a queue of around 100 people could be seen forming one morning last week. They were awaiting their…

Post #23: 5G is coming to you soon(ish)

Right by St Paul’s Cathedral in the heart of London’s City, a queue of around 100 people could be seen forming one morning last week. They were awaiting their new mobile handsets – the first available for 5G services in the UK. With their phones, lucky customers had the option of seeing a special concert performed by Stormzy (a popular UK music artist) live-streamed…

For those unfamiliar, 5G has the potential to offer a step-change in data/connectivity speeds, constituting around a 100-fold increase relative to current 4G offerings. While South Korea became the first major nation to turn on 5G in April, the UK is ahead of the rest of Europe in respect of launching commercial services. Vodafone will follow EE in the UK by turning on its initial 5G proposition this month. Initially, services will be available only in major cities via a very limited number of handsets, with nationwide roll-out and broader availability occurring in the next 3+ years.

Why does 5G matter? First, the fact that mobile networks are beginning to offer services highlights that despite the current US stance towards Huawei (which is a leading equipment provider in this field), the technology continues to move ahead. Next, the reason why is simply because much of the future can’t happen without 5G. In other words, for the practical deployment of any ‘edge’ services (i.e. those requiring computer processing close to the location where it is needed), 5G is a necessity. Consider that self-driving cars or a fully enabled internet of things cannot function unless low-latency, high-density mobile networks are rolled out. Complex and life-critical decisions such as whether a car should stop at a junction need real-time, instantaneous, data-processing capabilities. 

Of course, it will take time for 5G networks to be fully rolled out, while not all the technological protocols (such as interoperability with 4G networks) have been finalised. Furthermore, in the near-term, much of the broader 5G debate has become politicised owing to deteriorating US-China relations. Nonetheless, we noted with interest comments from the Chief Executive of Keysight Technologies (the leading player within the network test industry) last week: despite record order at its business, 5G is “still in the very early stages of realising its transformative potential.”   

Disclaimers

The document is provided for information purposes only and does not constitute investment advice or any recommendation to buy, or sell or otherwise transact in any investments. The document is not intended to be construed as investment research. The contents of this document are based upon sources of information which Heptagon Capital believes to be reliable. However, except to the extent required by applicable law or regulations, no guarantee, warranty or representation (express or implied) is given as to the accuracy or completeness of this document or its contents and, Heptagon Capital, its affiliate companies and its members, officers, employees, agents and advisors do not accept any liability or responsibility in respect of the information or any views expressed herein. Opinions expressed whether in general or in both on the performance of individual investments and in a wider economic context represent the views of the contributor at the time of preparation. Where this document provides forward-looking statements which are based on relevant reports, current opinions, expectations and projections, actual results could differ materially from those anticipated in such statements. All opinions and estimates included in the document are subject to change without notice and Heptagon Capital is under no obligation to update or revise information contained in the document. Furthermore, Heptagon Capital disclaims any liability for any loss, damage, costs or expenses (including direct, indirect, special and consequential) howsoever arising which any person may suffer or incur as a result of viewing or utilising any information included in this document. 

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