The investment required to upgrade a network to support standalone 5G technology is important. JP Morgan think this is the reason why Telecom companies stocks did not do so well last year.
There is a serious concern that the investment might not be as effective as expected. The lack of return put an important shade on some valuation for some asian (China, Japan and South Korea) and Australian telecommunications stocks.
Those worries could be explained as the daily applications and advantages of 5G technology are yet to be seen and to be invented.
James Sullivan,head of Asia ex-Japan equity research at J.P. Morgan explained “It’s not really about faster download speeds,” he said. “It’s about internet of things, autonomous vehicles and things of that nature for which no one understands a monetization case for networks yet.”
5G will not only be customer centered but also will help companies in processing huge data in artificial intelligence or autonomous driving. Previous generations of technologies were more focused on giving users a faster and better experience.
