Register For Our Mailing List

Register to receive our free weekly newsletter including editorials.

Home / 299

5G mobile promises to connect and speed up everything

In Bulgaria, the country’s mobile or wireless phone operator Mobitel exhibited fifth generation or 5G technology during a virtual reality demonstration. Russian telecom Megafon and Qualcomm tested 5G in Moscow while Vodafone hosted Ireland’s first live 5G test. In the US, Verizon now offers 5G internet for homes in a few locations. In Australia, Telstra connected a customer with a commercial 5G device on 5G technology for the first time. These are just some of the trials completed or underway in recent months as the world prepares for a transformative leap in mobile.

5G potential to transform lives

5G’s promises include vast improvements in data speeds at lower cost, much faster response times (known as ‘lower latency’ in industry jargon), greater connection density and lower battery consumption on devices. These benefits will arrive as beam forming and dynamic spectrum allocation, software-defined networking and the deployment of wide bands of higher-frequency radio spectrum, among other technological advancements, turn existing 4G networks into 5G networks over the next decade.

5G is expected to transform daily life because it will enable key developing technologies such as the internet of things (when everything is linked), driverless cars, smart factories, connected utilities, voice-triggered devices, remote surgery, artificial intelligence, and augmented and virtual reality, even if these advances have other challenges.

The vital nature of 5G is the mass connectivity it will foster, and the potential for 5G-enabled applications to shift data processing from the ‘core’ to the less-secure ‘edge’ of networks.

Potential for slow adoption

However, these are colliding with two forces that may slow 5G’s adoption, boost its cost and make it more politically disruptive than earlier versions of mobile connectivity.

The first issue hampering 5G’s deployment is that it magnifies the risks posed by the insecure nature of the internet. If everyone and everything will connect to the internet, 5G networks must be made far more secure than the worldwide web has proven to be so far.

The second challenge is that 5G is tangled up in the rivalry between China and the US. This reflects the role 5G will play in determining the next generation of giant technology companies (as 4G helped elevate Alphabet, Apple and Facebook) plus the importance nations attach to having guaranteed access to leading telecom equipment. The latter is the biggest cause of tension because China’s Huawei Technologies has surpassed Western peers Ericsson and Nokia to become the world’s leading telecom equipment maker over the past decade. That some regard Huawei as an instrument of the Communist Party makes it (and other Chinese companies) unwelcome in the US and some allied countries. including Australia. While the deployment of 5G will be slower, more troubled and less economical than it should be, these hurdles will hopefully lead to more secure 5G networks in time.

To be sure, even in the best of circumstances, the infrastructure required means 5G will take much time and money to be broadly deployed. Another hurdle is that the rate of 5G uptake will depend on how quickly people buy the new, more costly 5G phones capable of receiving 5G signals and the new spectrum bands in which it is deployed. The lack of security on the internet came at its birth and will be hard to overcome. The differences between the US and China are ideological, political and commercial; the new wireless technology is not the central issue in the Beijing-Washington rift.

5G thus has much to navigate for its benefits to fully materialise. But technological advancements usually hold sway in the end. The benefits of 5G are there to be widely shared in time if networks can be secured.

 

Michael Collins is an Investment Specialist at Magellan Asset Management, a sponsor of Cuffelinks. This article is for general information purposes only, not investment advice. For the full version of this article, go to: https://www.magellangroup.com.au/insights/.

 

For more articles and papers from Magellan, please click here.


 

Leave a Comment:

banner

Most viewed in recent weeks

Why the $5.4 trillion wealth transfer is a generational tragedy

The intergenerational wealth transfer, largely driven by a housing boom, exacerbates economic inequality, stifles productivity, and impedes social mobility. Solutions lie in addressing the housing problem, not taxing wealth.

The 2025 Australian Federal election – implications for investors

With an election due by 17 May, we are effectively in campaign mode with the Government announcing numerous spending promises since January and the Coalition often matching them. Here's what the election means for investors.

Finding the best income-yielding assets

With fixed term deposit rates declining and bank hybrids being phased out, what are the best options for investors seeking income? This goes through the choices, and the opportunities and risks involved.

What history reveals about market corrections and crashes

The S&P 500's recent correction raises concerns about a bear market. History shows corrections are driven by high rates, unemployment, or global shocks, and that there's reason for optimism for nervous investors today. 

Howard Marks: the investing game has changed

The famed investor says the rapid switch from globalisation to trade wars is the biggest upheaval in the investing environment since World War Two. And a new world requires a different investment approach.

Welcome to Firstlinks Edition 605 with weekend update

Trump's tariffs and China's retaliatory strike have sent the Nasdaq into a bear market with the S&P 500 not far behind. What are the implications for the economy and markets, and what should investors do now? 

  • 3 April 2025

Latest Updates

Investment strategies

4 ways to take advantage of the market turmoil

Every crisis throws up opportunities. Here are ideas to capitalise on this one, including ‘overbalancing’ your portfolio in stocks, buying heavily discounted LICs, and cherry picking bombed out sectors like oil and gas.

Shares

Why the ASX needs dual-class shares

The ASX is exploring the introduction of dual class share structures for listed companies. Opposition is building to the plan but the ASX should ignore the naysayers and bring Australia into line with its global peers.

The state of women's wealth in Australia

New research shows the average Australian woman has $428,000 in net wealth, 40% less than the average man. This takes a deep dive into what the gender wealth gap looks like across different life stages.

Investing

The two most dangerous words in investing

Market extremes are where the biggest investment risks and opportunities lie. While events like this are usually only obvious in hindsight, learning to watch out for these two words can alert you to them in real time.

Shares

Investing in the backbone of the digital age

Semiconductors are used to make microchips and are essential to a vast range of technology and devices. This looks at what’s driving demand for chips, how the industry is evolving, and favoured stocks to play the theme.

Gold

Why gold’s record highs in 2025 differ from prior peaks

Gold prices hit new recent highs, driven by a stronger euro, tariff concerns, and steady ETF buying – all while the precious metal’s fundamental backdrop remains solid amid a shifting global economic landscape.

Now might be the best time to switch out of bank hybrids

In this interview, Schroders' Helen Mason discusses investing in corporate and financial credit securities, market impacts of tariffs, opportunities for cash investments, and views on tier two and hybrid bonds.

Sponsors

Alliances

© 2025 Morningstar, Inc. All rights reserved.

Disclaimer
The data, research and opinions provided here are for information purposes; are not an offer to buy or sell a security; and are not warranted to be correct, complete or accurate. Morningstar, its affiliates, and third-party content providers are not responsible for any investment decisions, damages or losses resulting from, or related to, the data and analyses or their use. To the extent any content is general advice, it has been prepared for clients of Morningstar Australasia Pty Ltd (ABN: 95 090 665 544, AFSL: 240892), without reference to your financial objectives, situation or needs. For more information refer to our Financial Services Guide. You should consider the advice in light of these matters and if applicable, the relevant Product Disclosure Statement before making any decision to invest. Past performance does not necessarily indicate a financial product’s future performance. To obtain advice tailored to your situation, contact a professional financial adviser. Articles are current as at date of publication.
This website contains information and opinions provided by third parties. Inclusion of this information does not necessarily represent Morningstar’s positions, strategies or opinions and should not be considered an endorsement by Morningstar.