December 9, 2021
3 mins

Unstoppable trends | 5G and beyond

December 9, 2021
3 mins
Joe Fiorica
Head of Global Equity Strategy
Archie Foster
Co-Head of Global Equities, Citi Investment Management
Wietse Nijenhuis
Senior Equity Portfolio Manager, Citi Investment Management

The rollout of 5G technology enables a step-change in digitization through businesses and in our lives. We recommend investment exposure to select 5G players and beneficiaries.

The connection to our future

The rollout of fifth generation (5G) wireless data networks is now well underway in many countries

5G’s higher speeds and low latency enables a huge array of new activities that were previously impossible

5G – and eventually the still-fledgling 6G and satellite-based internet technologies – will connect billions of devices for the first time ever

Data becomes the new oil - A vast increase in data will lead to greater economic activity, efficiency and improve the value of artificial intelligence

We seek investment exposure to this unstoppable trend via 5G-related real estate and beneficiaries including artificial intelligence, telemedicine and autonomous vehicles

Across much of the world, 2021 was a year of reunion and reconnection. Though we face an extended pandemic as we begin 2022, the adoption of digital everything has mitigated our isolation and improved our efficiency.

2021 saw significant advances in digital connectivity. The rollout of fifth generation or 5G wireless technology ramped up. The number of cities globally with 5G coverage leapt by some 350% year-on-year to over 1,336.10 Download speeds in some of the first places to have embraced the standard are accelerating. By 2025, one-third of the world’s population is likely to have 5G coverage, according to telecom industry consortium GSMA.

The benefits of 5G are material

We believe the ongoing rollout of 5G - and the promise of even faster and more reliable connections in the race to develop 6G - could have far reaching impacts on business and everyday life. Whereas previous generations of wireless technology have mainly helped connect people to one another and to their devices, the Internet of the Future is set to do much more.

This could include unleashing important advances in artificial intelligence, cloud computing, robotics and the Internet of Things (IoT). 5G and its descendants will not only enhance connections between people but also create new networks between devices that were never previously linked.

The 5G difference

5G networks promise to provide connectivity 10 times faster and much more reliably than 4G, although maximum speeds are only likely to be available in dense urban centers. The higher ranges offered by lower band 5G, and eventually satellite wireless technologies being developed by several major tech companies, could provide internet access to hundreds of millions of people worldwide for the first time, particularly in rural locations and in emerging markets.

While most residences in rich urban centers rely on wired connections for internet in their homes, we see 5G’s speeds and reliability as likely to enable fixed wireless broadband a much cheaper and less capital-intensive solution than running fiber into every home.

Outlook 2022

Explore our high conviction views.

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Outlook 2022

Explore our high conviction views.

View all insights