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

Are you making these SMSF mistakes?

After four decades advising investors, there are a few common mistakes I've seen SMSF investors make. From holding too much cash and chasing yield to overtrading and trusting tips. Are these errors costing you?

Why have Australian living standards 'fallen' and how do we fix it?

For the last few years there has been much talk of a 'cost-of-living' crisis in Australia and of 'falling living standards'. Lately this has flared up again with the pickup in inflation resulting in a renewed fall in real wages.

Retirement spending is not one-size-fits-all

New data challenges the idea that Australians are underspending their super. The bigger issue may be helping retirees navigate complexity, make confident decisions and use their savings to support security, wellbeing and choice.

Will you run out of money in retirement?

Fear of running out has become a defining retirement anxiety. Why do some retirees die with substantial wealth while others deplete their nest egg? Evidence suggests the answer is more complicated than we think. 

Four options for an income investor’s next dollar

What if Australia’s golden age of dividends is ending? Rather than overhaul your portfolio, it may be worth considering where new capital can work harder. I discuss four income strategies and the trade-offs behind each.

The missing link in the CGT debate

A little-noticed consequence of Labor’s tax changes could have implications well beyond investors’ tax bills. The issue raises bigger questions about incentives, capital allocation and the drivers of long-term economic growth.

Latest Updates

SMSF strategies

Meg on SMSFs: What do we think about reversionary pensions these days?

Reversionary pensions have long been a staple of SMSF estate planning, but are they still the best option? Meg Heffron revisits a once-clear favourite and asks whether changing super rules have shifted the balance.

The ageing ‘crisis’ has not and will not happen

Rising age dependency is frequently treated as a warning sign for economies. But when actual workforce participation is examined, a strikingly different picture emerges about ageing, productivity and economic sustainability.

Retirement

How does the 4% rule stack up?

The 4% rule has long been retirement's gold standard. But after a difficult period for investors, fresh analysis suggests a more conservative approach may significantly improve the chances of making savings last.

Shares

Four charts that expose market concentration risk

Investors have recently been rewarded for backing market leaders, but history suggests this eventually comes at a cost. Now may be the time to review whether your portfolio is carrying unintended risks beneath the surface.

Investment strategies

The case for gearing beyond property

Most Australians gear into property but ignore shares. That may be a mistake. Used carefully, geared equity strategies can enhance long-term returns, reduce cash tied up in growth assets and support retirement income goals.

Economy

Australia's $1 trillion debt pile

The headlines exclaiming that Australian government debt has hit A$1 trillion and US government debt has hit $40 trillion has turned heads, but how serious are they really? Will Australia's mix of debt create challenges?

Economy

Has 100 years of growth made us any happier?

For decades, GDP has been the benchmark for economic success, but has it made us materially happier? If happiness does not rise in lockstep with prosperity, are we overlooking what constitutes a successful society?

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.