Home in the Cocoon

In its earnings conference call presentation on January 29th, Verizon indicated that the equipment needed to roll out 5G home in scale was not yet available.  Elements of infrastructure and architecture might be in place as a precursor to product rollout but I would posit that the end product itself is currently cocooned in a limited pilot stage deployment.     

To add icing to the cake of irony, a myopically focused “analyst” from a major financial institution asked: “When will the cell phones be ready?”  The answer from Verizon was that Motorola and Samsung were in the process of developing the phones and only one of the two has actually been seen in its physical form.  For the real answer:  Can you hear me now?  5G IS NOT A CELL PHONE-CENTRIC TECHNOLOGY!!!!!  

The takeaway for investors is that 5G will have a long timeline to market.  Being a strategically large project, many physical components have to be in place far in advance in order for 5G technology to become useful and eventually ubiquitous.  It will not be cost-effective or reasonable to expect this technology to be deployed to service low-density populations.     

Point-to-point 5G for the home in cities and suburbs, and private Broadband Wireless for enterprise-specific or task-specific networks will reach the marketplace in sync with one another. As Verizon looks to deploy point-to-point to the home to improve cost efficiencies, Volkswagen, BASF, Daimler, Bosch, and Siemens are expected to apply for regional licenses from German regulators which in turn will enable them to develop to new industrial use cases specific to their needs.        

Perhaps equipment and fiber first with the carrier networks to follow might be an investment thesis to consider.  I wonder what will happen when near-term expectations from investors and consumers regarding 5G are not met. 

Copyright Warren Pollock 1/30/2019 Edited by Mike Botwin