As we step into the new year 2023, the 5G revolution is gaining momentum across the globe. The faster connectivity, lower latency, and higher bandwidth offered by 5G are expected to revolutionize the way we interact with technology. With the deployment of 5G networks, several industries are expected to undergo a transformational shift. As the demand for faster and more reliable connectivity grows, the companies working in the 5G space are poised to grow in the coming years. In this blog, we will delve into what 5G technology is, the key technologies that make it possible, and most importantly, what are the 5G stocks in India that are worth investing in 2023.
What is 5G?
5G (fifth generation) is the latest mobile network technology, succeeding the fourth generation (4G) technology. It is designed to offer faster internet speeds, improved connectivity, reduced latency, and increased capacity compared to its predecessors. Here are some of the key differences between 5G and earlier generations of mobile networks:
Speed:
5G networks are designed to deliver significantly faster data speeds than previous generations of mobile networks. With 5G, users can expect download speeds of up to 10 Gbps, which is about 100 times faster than 4G. This means you can download large files or stream high-quality videos with ease.
Latency:
5G networks offer lower latency than 4G networks, which means there is less delay between sending a request and getting a response. This is important for applications that require real-time interactions, such as gaming or video conferencing.
Capacity:
5G networks are designed to handle more devices and more data than previous generations of mobile networks. This means that as more devices connect to the network, the performance will not degrade.
Energy efficiency:
5G networks are designed to be more energy-efficient than previous generations of mobile networks. This is important because it means devices
The key perks of 5G is its ability is to use higher frequency bands than previous generations, such as millimeter wave (mmWave) frequencies. These high-frequency bands allow for much greater data transmission speeds, with theoretical peak speeds of up to 20 Gbps, which is significantly faster than what is currently possible with 4G.
Another key feature of 5G is its low latency, or the amount of time it takes for data to travel from the sender to the receiver. 5G can achieve latencies as low as 1 millisecond, which is a significant improvement over the 30-40 millisecond latencies seen in 4G networks. This low latency is critical for applications such as autonomous vehicles, where even a slight delay can have serious consequences.
5G also uses advanced antenna technologies, such as massive MIMO (multiple input, multiple output) and beamforming, to improve signal strength and coverage. These technologies allow for more efficient use of available spectrum and can help to mitigate issues with signal interference.
5G represents a significant leap forward in cellular technology and has the potential to enable a wide range of new applications and services, from smart cities and connected factories to virtual and augmented reality. However, the implementation of 5G will require significant investment in new infrastructure, such as small cell sites and fiber-optic backhaul, and will likely take several years to roll out fully.
5G Core:
The 5G core is the “brain” of the 5G network. It’s responsible for managing all the different parts of the network and making sure everything works together smoothly.
Think of it like a conductor of an orchestra. The conductor makes sure that all the musicians are playing the right notes at the right time, and that the music sounds good. Similarly, the 5G core makes sure that all the different parts of the network – like the antennas, radios, and data centers – are working together properly and providing you with a fast and reliable connection.
The 5G core is also designed to support a wide range of new technologies and applications, like virtual and augmented reality, smart cities, and self-driving cars. These applications require a lot of data to be processed quickly, and the 5G core is built to handle this demand.
ECpri
ECpri is a technology used in 5G networks that helps to connect different parts of the network together. Think of it like a bunch of puzzle pieces that need to fit together perfectly in order for the network to work properly. ECpri helps to make sure that all the puzzle pieces fit together smoothly and efficiently, which makes the network run faster and more reliably.
What are 5G Stocks?
The advent of 5G technology has created a lot of buzz in the tech industry, and investors are eagerly seeking out 5G-related stocks to add to their portfolios. In India, there are several 5G-related stocks that investors can consider.
One of the most well-known 5G stocks in India is Bharti Airtel, which is one of the country’s largest telecommunications companies. Airtel has been actively expanding its 5G network capabilities, and investors are bullish on the company’s potential for growth as 5G technology becomes more widespread.
Another 5G-related stock to consider is Reliance Industries, which is one of India’s largest conglomerates. The company has invested heavily in its telecommunications division, Jio, which has been expanding its 5G network capabilities in recent years.
Other 5G-related stocks to keep an eye on in India include Vodafone Idea, which has also been investing in 5G technology, as well as Sterlite Technologies, which provides fiber optic cables and other infrastructure for telecommunications companies.
How can you invest in 5G Stocks?
When it comes to 5G stock prices, it’s important to remember that investing in the stock market always carries some degree of risk. The prices of 5G-related stocks can be affected by a wide range of factors, including global economic conditions, regulatory changes, and technological advancements.
However, for investors who believe in the potential of 5G technology, there are plenty of compelling stocks to consider. Some analysts have even suggested that the 5G revolution could be as transformative as the introduction of the internet itself, which could lead to significant growth opportunities for companies in the space.
If you’re considering investing in 5G stocks in India, it’s important to do your research and choose companies that have strong fundamentals and a track record of success. It’s also a good idea to diversify your portfolio and not put all your eggs in one basket, as investing in the stock market always carries some degree of risk.
Should you invest in 5G Stocks?
The 5G space is an exciting area of growth for investors, and there are plenty of opportunities to find stocks that could offer strong returns in the coming years. Whether you’re looking for large-cap telecom companies like Airtel and Reliance, or smaller penny stocks in the infrastructure space, there are plenty of options to consider when it comes to investing in 5G-related stocks in India.
Investors looking to invest in 5G-related stocks in India can also consider exchange-traded funds (ETFs) that focus on this theme. One such ETF is the Motilal Oswal 5G Fund, which invests in companies that are likely to benefit from the 5G wave. The fund has holdings in companies such as Bharti Airtel, Reliance Industries, and Tata Communications, among others.
5G TELECOMMUNICATION SERVICE PROVIDER COMPANY TO INVEST IN 2023:
Bharti Airtel:-
Bharti Airtel has already started rolling out 5G services in some cities in India. The company is also collaborating with international players to develop the technology and is expected to continue investing in this space. Bharti Airtel is the strongest competitor to Reliance Jio in the Telecom space.
Bharti Airtel’s CEO said in an interview with the Economic Times, that 5G handset shipments are steadily increasing and when the power of 5G is mainstream, adaptation will pick up pace.
It is India’s second largest telecom operator with 32.8 crore wireless customers in India and 13.2 crore subscribers across 14 African countries. The company indicated that it has launched 5G services and expect to cover 100% urban cities and most rural areas by 2024. The 5G launch will entail advancement of CAPEX. In Q3, it has reported revenue of ₹ 35,804 crore and increases by 3.7% from Q2. It has a market capitalization of ₹4,32,512 crore and 556.4 crore of shares outstanding.
Mahanagar Telephone Nigam Ltd:-
MTNL is the largest ISP and having maximum market share in Mumbai and Delhi. It is fully owned subsidiary of BSNL. Currently trading at ₹19.05. Debt to Equity Ratio is -1.4 and is less than 1 and healthy. Thus it implies that its assets are financed mainly through equity. Price to Earning Ratio is -0.4, lower than its sector PE ratio of 52.1. It has reported total revenue at ₹354.3 crore for Q3.
Reliance Jio –
Reliance Jio is a strong market player in telecom services in India. Jio recently acquired the streaming rights for IPL – India’s Premier Cricket League for its Television wing Jio TV. Now, just before IPL, JIO has reduced Broadband prices. This will have an impact on Cable TV subscribers who would shift to a digital ecosystem for television streaming thanks to reduced broadband prices.
Bharti Airtel, Jio’s prime competitor does not plan to reduce broadband tariffs as well and its heads on pricing war! The company evaded questions about tariff reduction and maneuvered instead to stress about the importance of increasing revenue per unit sustainably.
This is ‘The “Case Study”‘ company that boosted Freebies driven startup market and valuations in India, Reliance Jio is a telecom company owned by Reliance that monetized the vast market in India by religiously investing in customer acquisition first with the only leverage being – sheer population (opportunity) and reliable metrics for retention. Revenue from operations jumped by 20.18% to ₹67,392 crore compared to ₹56,076 crore YOY.
OTHER 5G TELECOM SERVICE PROVIDER COMPANIES:
Vodaphone India –
Vodafone Idea Limited is an Aditya Birla Group and Vodafone Group partnership. The Company provides pan India Voice and Data services across 2G, 3G and 4G platform. The ROE for the company declined by 45.6% during FY22.
Tata Communications –
Tata Communications reported 1167.32 Crores profit and its operating income increased YOY from 6499.88 Crores to 7145 Crores.
5G TELECOMMUNICATION EQUIPMENT COMPANY TO INVEST IN 2023
ITI Ltd:-
It is a public sector undertaking in the telecommunication technology segment. Currently trading at ₹88.55 having market capitalization of ₹8427 crore. The company stated earnings of ₹68 crore for last 12 months and PE ratio stand at 123.54.
HFCL Ltd:-
It is an India-based company that is primarily engaged in manufacturing of telecommunication equipment, optical fiber cables and intelligent power systems. The Company is a manufacturer of optical fiber cables, optical transport, power electronics and broadband equipment for the telecommunication industry. Currently trading at ₹62.35 having market capitalization of around ₹85.73 billion.
Sterlite Technologies Ltd:-
This small-cap company is a leading player in the fiber optic space and is likely to benefit from the increased demand for fiber optic cables in the 5G era. The company has also been investing in developing 5G-related technology and is likely to be a key player in this space.
It is a leading telecommunication infrastructure player with offerings in optical fibre and optical fibre cables, hyper-scale network design, and deployment and network software having market capitalization of ₹6961 cores.It has reported EBITDA margin at 12.9% ie, ₹243 crores.
Indus Towers:-
It is an Indian telecommunication tower company offering passive infrastructure services to telecom operators having market capitalization of ₹426 billion. It has reported 17.2% as EBITDA for Q3. And dividend yield of around 7%.
Tejas networks:-
It is an optical , broadband and data networking product company based in India currently trade at ₹602. 05 having market capitalization of ₹101.39 billion. It’s enterprise value is ₹4658.93 crore.
Disclaimer:
Not advisory in nature.
