Even if the 5G opportunity takes more time to play out, Barron's believe there is still a powerful near-term investment opportunity for the technology: Chinese infrastructure.
In a story published on October 4, Barron's argue that 5G may come together slowly in the US market, but China is serious about winning the race.
Behind this conclusion, Multiple Wall Street analysts are getting more optimistic about China’s 5G buildout.
For instance, Rosenblatt Securities notes that local governments in China are providing subsidies to “speed up 5G network deployments.” As a result, Rosenblatt says, more than 300 cities in China will have 5G networks by the end of next year.
Even Rod Hall, the Goldman Sachs 5G skeptic, expects 120 million 5G smartphones to ship next year, largely because of China’s aggressive buildout.
In a report this past week, Piper Jaffray analyst Harsh Kumar cited a Chinese think tank that sees China-based companies spending $411 billion on 5G networks from 2020 to 2030.
Of the 600,000 5G base stations expected to be rolled out worldwide next year, Kumar says half will be deployed in China: “We expect 2020 global [5G] deployments to largely be driven by the Chinese market.”
5G, short for fifth-generation wireless, promises to be the heartbeat of the future.
Expected to be 100 times faster than today’s 4G networks, 5G’s seamless connections could enable innovations such as driverless cars, robot-run factories and remote surgery.
Because 5G is set to be embedded in so many fields of endeavor, those who can dominate the technology is likely to reap outsize profits, attract top-tier engineering talent and seize an edge in other critical future technologies.
As a result, Barron's is not alone in seeing China's pontential in developing 5G.
In a lenthy story published one month ago, the Wall Street Journal noted that just as America’s trailblazing 4G networks helped Uber Technologies and Instagram reach global heights, 5G could turbocharge some Chinese companies.
It might also help China’s efforts to stem a scientific brain drain that has led some of its brightest students to study abroad and then stay there.
China is on pace to have at least 150,000 5G wide-area base stations available for anyone to use, by the end of the year, more than any other country, said Chris Lane, a Bernstein analyst and former strategy director for Vodafone Group PLC.
Bernstein estimates South Korea will place second with 75,000, while the U.S. will have 10,000 such sites by the year’s end.
