JP Morgan Says 5G Technology Is Hurting Telecom Stocks

JP Morgan Says 5G Technology Is Hurting Telecom Stocks


According to CNBC, JP Morgan says that 5G technology is affecting some telecom companies and stocks negatively.

JP Morgan

CNBC explains that JP Morgan says it knows why certain telecom companies and their stocks performed poorly last year.

CNBC says that according to a note by JP Morgan in April, the bank said that investors were worried and expressing concerns about 5G technology and the returns last year. CNBC also reports that analysts at JP Morgan said that Japanese, Chinese, South Korean and Australian telecommunication companies were most likely the first to utilize 5G technology and that the stocks to each market showed a “Depressed Valuation”.

The Head of Asia ex-Japan equity research at J.P. Morgan, James Sullivan, told CNBC that many of the uses behind the 5G technology are still only theoretical because the technologies do not really exist just yet and that many of the expectations of the technology exceed its actual impact.

Fifth Generation

Fifth generation technology is technology designed to process the endlessly growing web traffic and offer even faster, smoother and stronger internet speeds as well as data transfer.

According to CNBC, analysts at JP Morgan said that investors showed concerns towards the costs and expenses of the technology in development. They also had to make a choice between two types of the tech, non-standalone 5G or standalone 5G. The first refers to a type which is introduced into networks that already exist, upgrading whenever necessary.

Standalone 5G refers to an entirely new network operating on fifth-generation technology which is constructed from nothing and would need significantly larger investments. As CNBC reports, James Sullivan said: “The major envisioned use cases are still many years away, such as autonomous cars and industrial applications,” and “Mass market adoption for the major identifiable use case for 5G is still [more than] 10 years away.”