After a record bidding time, 14 hours, on July 21, Telefónica, Vodafone and Orange acquired 5G services in Spain for 1,010 million euros. But what is 5G? These lines would not be enough to detail where it comes from, where it is going and its multiple applications in various sectors, so the definition that best fits the term is the fifth generation mobile network.
But before delving into Spain, a brief review of the world panorama. According to a report published by the Global Mobile Suppliers Association (GSA), the fifth generation of mobile technologies was available in 72 countries or territories, with 175 operators in August 2021 and 137 countries were investing in 5G through trials or trials.
In China a total of 30,000 million dollars was allocated in 2020, according to Global Data calculations. Rolando Grandi, fund manager at Financière d l’Echiquier, thinks that the eastern country is the first in the world in terms of investment in the new mobile network, “but due to the potential for adopting this telecommunications standard”, although he also mentions Korea of the South and Japan that, “probably, are the most advanced when it comes to the deployment of 5G”.
You’re right. According to a June GSA report, se expects that by 2025 almost 60% of mobile subscriptions in South Korea, the country that deployed the first 5G network, will be for the same. Specifically, a report by OpenSignal reveals the top 10 countries that lead the leadership for 5G: South Korea, Taiwan and Saudi Arabia, in the lead. Spain is in ninth place, ahead of Canada. José Antonio González, Investment Strategies analyst, says that “Spain is the leader in 5G connectivity in Europe and accumulates more fiber optic networks than France, Germany, Italy and Portugal combined.”
Within the Spanish market, two actions stand out: Cellnex, a benchmark in Europe in telecommunications infrastructure, and Telefónica, the main Spanish operator that hopes to offer 5G networks for all its customers, companies and individuals. They are revalued so far this year by 32% and 36%, respectively. Darío García, an analyst at XTB, in addition to those mentioned, points out other companies on the Spanish stock market such as Euskaltel, Ezentis, Global Dominion or Amper.
Regarding the last value, Mónica Triana, Investment Strategies trading analyst, points out that, from the end of 2019 to March 2020, Amper lost almost 63.5% of its price and then started a lateral upward movement with which it has got to slightly exceed 61.8% Fibonacci. According to his technical analysis, “you have to watch the minimum at 0.16 which, if lost, could give way to the support zone between 0.15 and 0.14,” he adds.
As for Telefonica, the beach areas where the operator has carried out a greater 5G deployment in August are in the Autonomous Communities of Catalonia, with 37 towns; Andalusia, with 24, and the Valencian Community, with 24. This broad array also includes the Canary Islands and the Balearic Islands. According to the same expert, the value would try to go to 5.70 euros prior to the pandemic, but “if the minimum of control were lost at 3.61, a significant downward movement could be generated that would take the price to the 3.35 area. -3 ”, he clarifies. The Reuters analyst consensus recommends ‘hold’ with a 6% potential.
And the jewel of the analysts: Cellnex. Although the Reuters consensus also welcomes Telefónica, it regards the Barcelona-based multinational (‘buy’) with more optimism. For her part, Mónica Triana comments that “since the price left the Ichimoku cloud in April 2021, it has started a very accelerated uptrend section, setting record highs since June.” He adds that the area between 53.59 and 52.92 is an important support that the price could find if it began a bearish section.
From XTB they remember that Cellnex is the second listed company in the world in the development of infrastructures for this type of network, behind American Towers. Another option to invest in this niche is to do so “through sectorial telecommunications ETFs from iShares or thematic investment funds such as the Neuberger Berman 5G Connectivity”, explains González.
In line with American Towers, there are also companies such as T-Mobile, AT&t o QualcommThe latter is a producer of chipsets and, given that the development of semiconductors is intrinsically related to this sector, it would be a name to be seriously considered, says Darío García. The semiconductor industry has encountered a cyclical increase in demand favored by the recovery in orders after the Covid-19 crisis and the need for new devices due to the trend to work from home. Consequently, the shortage of these products has worsened.
Beyond the chip industry, the logistics sector also has great potential in adopting the new network. Rolando Grandi points out that, in the US, mainly in Phoenix and California, trials are already being carried out and he thinks that “the deployment of 5G will accelerate the implementation of the first autonomous trucks and delivery drones in the country.”
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