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.

 

  •   28 March 2019
  •      
  •   

 

Leave a Comment:

banner

Most viewed in recent weeks

It’s time for LICs to die

A high-profile dividend cut and a prominent fund manager’s apology have reignited a long-running debate. If investors can access similar exposures more cheaply and efficiently elsewhere, what exactly is keeping LICs alive?

Testamentary trusts survived the trust tax. The drafting battle has just begun.

The fight over testamentary trusts looked settled. Then the draft legislation arrived. Hidden in a technical detail is a question that could force many families to rethink wills they thought were already future-proof.

The new capital gains tax trap for your portfolio

Investors have long accepted one portfolio rule without much question. A major tax shift could change that calculation entirely, forcing difficult trade-offs between risk, discipline and an overlooked cost lurking beneath.

The retirement scorecard: how many of these questions can you answer?

From the maths of retirement, estimating spending and picking the right asset allocation to survive a poor decade, here are the questions every retiree – current or future – should be able to answer for themselves.

How the typical Australian Family could save $844,350 in taxes

The value of a testamentary trust is not determined by wealth alone. Depending on circumstances, it can reduce the tax burden on inherited income, create efficiencies and help build intergenerational wealth.

The housing slide could become a crash

House prices are sliding across Australia, yet the most dangerous ingredient for a housing crash is still missing. If job losses surge amid growing economic risks, today's correction could become a historic property downturn.

Latest Updates

Testamentary trusts: Treasury has picked the wrong reading

A decades-old estate planning tool has survived one tax crackdown only to be caught by another. The surprise isn't who the reform is targeting, but who could end up paying the price for drafting choices made years ago.

Latest from Morningstar

Does an American retirement rule work for Australians?

The 4% rule has survived decades of scrutiny, but Australia's retirement system changes the equation in ways most overlook. Before accepting or rejecting this rule of thumb, it pays to understand what really drives retirement outcomes.

Shares

Glencore lands on the ASX. Should BHP and Rio shareholders switch?

A coal-heavy miner with governance concerns isn't the obvious choice for investors. Yet, Glencore's ASX listing may offer something BHP and Rio can't. The challenge is working out whether the opportunity outweighs the risks.

Why does the system treat capital gains and losses differently?

Investors are often told not to let tax policy drive their investment decisions. Yet, under the new CGT rules, portfolio construction, volatility and even how assets are owned may have an outsized impact on their final outcome.

Economy

Three common sense reforms that Australia needs

What do frozen bank accounts, mortgage traps and pension penalties have in common? They're all symptoms of a system that makes life much harder. Yet the obvious solutions seem to have escaped the attention of Canberra.

Shares

The hidden cost of government debt for investors

Some of the important effects of rising public debt never make the headlines. Research shows the immediate effects may already be unfolding, influencing corporate behaviour in ways that many investors would never suspect.

Investment strategies

When do fundamentals matter?

Is fundamental investing losing its grip on markets? Investors continue to search for valuation-based explanations for every price move, but the dominant force behind short-term returns may be something else altogether.

Sponsors

Alliances

  • ASA-Logo-RGB-ActiveGreen-web.png

© 2026 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.