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Proprietary Data Insights Financial Pros 5G Stock Searches in January
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Why Care About 5G 5G is about more than playing the high-def version of Candy Crush. It’s about opening the funnel between heavy workload servers and mobile devices, including vehicles and IoT. 20 years ago, you were limited to the processing power in your computer or company server. So, if you wanted to access that super fast data, you had to go into the office. That’s why cloud computing AND network speed are so important. It’s much easier to process the data elsewhere and pump it back to devices than it is to build powerful devices individually. For cell phone users, pushing processing to the cloud means longer battery life. Yet, it also expands what’s possible for devices. Individually, your mobile phone would struggle to turn speech into text. Using the cloud, it becomes a breeze. 5G is the first step in moving us from our current mobile society to that next level. That’s why it’s pretty exciting to look at investing in ETFs like Defiance Next Generation Connectivity FIVG, First Trust IndXX NextG NXTG, and the like. |
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Key Takeaways
Faster mobile speeds are here. And with it comes more airline flight delays and cancellations. Are Delta (DAL) and Southwest (LUV) and the rest of the tin tubes in the sky crying wolf as they did with cell phones on planes? The Issues at Hand Verizon (VZ) and AT&T (T) are set to deploy their new 5G services. 5G uses a range of 3.7-3.98 GHz on the spectrum known as C band. Planes use altimeters (measures of height off the ground) which operate in a range of 4.2-4.4 GHz. These instruments facilitate automated landings as well as to detect dangerous currents known as wind shear. They’re also vital to low-visibility landings. Airline operators claim 5G networks will interfere with their equipment on many planes, disrupting up to 4% of daily flights. They’ve asked for a buffer of two miles around airports. Carriers agreed to delay 5G rollouts in some areas but don’t plan to hold back forever. Other countries don’t face the same issue. For example, France uses the 3.6-3.8 GHz range which is further away from the altimeter range. The power level used by France is also much lower. So far, there haven’t been any reported instances in France, South Korea, or the U.K. which implemented some 5G networks. Can We Fix the Problem? The FAA cleared 45% of the U.S. commercial airplane fleet to perform low-visibility landings at many airports where 5-G C-band will be deployed. Short-term, we may see the usage of the spectrum rearranged. Long-term, it comes down to developing and implementing stricter standards for altimeters. 5G already has specific requirements. So, some of the altimeters may be fine. Others may not be. They’ll have to go through them one by one to clear them. The ones that don’t will need to be upgraded, which no plan exists for yet. The other issue is that all of the potential problems are possibilities. A study done by the Aerospace Vehicle Institute (AVSI), concluded that a lack of uniformity meant some altimeters could suffer from interference. T-Mobile (TMUS) submitted a study by Alion, an engineering firm critiquing the study which highlighted flawed assumptions and data collection, such as two altimeter test failures caused by other altimeters, not 5G. Even the FCC disagreed with the AVSI study. They said well-designed equipment shouldn’t interfere with airplane equipment. The Bottom Line: Airlines tend to be overly cautious since the consequences of failure are extremely high. If we do see problems from interference arise, that would likely put a halt on 5G rollouts for the big carriers and hurt their stocks. On the flip side, if airlines start canceling flights, they’ll see shares drop as well. This is one of those situations where the news will dictate how things shape up. |
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