Thematic Reading - June 14, 2022
5G and eventually 6G will continue to drive digital infrastructure
While inflation worries and the risk the Federal Reserve and other central bankers may throw the global economy into a tailspin, Omdia Research sees the number of global 5G mobile connections surpassing 1.3 billion in 2022, up from 540 million at the end of 2021. To put some perspective around that, that year-over-year growth equates to more 5G subscriptions being added in 2022 than the total added over the prior three years. By the end of 2023 Omdia sees the number of 5G mobile connections passing 2 billion and reaching 4.8 billion by the end of 2026.
Helping drive that growth is the adoption curve in 5G devices, but also the continued deployment of 5G networks across the globe. Exiting 2021, the number of 5G commercial networks reached 216 according to data from TeleGeography and 5G Americas. By the end of 2022, that 5G network count should cross 330 and pass 352 soon thereafter, representing strong 5G network investment growth in many regions throughout the world. With almost 700 global LTE networks, the gap between the number of LTE and 5G networks should collapse further in the following years leading 5G to account for almost 60% of worldwide mobile service revenue in 2026, roughly $540 billion.
As we’ve witnessed in with prior generations of mobile technology, each of which has brought increased data speed, reduced latency, and greater bandwidth, data creation and consumption have exploded. As 5G proliferates, we should see that phenomenon not only continue but accelerate as the number of connected devices explodes and more data-rich applications become more commonplace. As the number of those data-rich applications grows as does their adoption it means the outlook for additional spending on networks, data centers, and other aspects of digital infrastructure remains bright. And past a certain point, it means the early work being done today on 6G will matriculate into a commercial network (see below for more on that!).
Now let’s dig into some articles that speak to those data-rich applications that help foster our bullish mood for our Digital Infrastructure & Connectivity investment theme, the corresponding ETF, and our thematic model. Here we go…
Digital Infrastructure & Connectivity
The buildout and upgrading of our Networks, Data Storage Facilities, and Equipment:
“At least one VR company is hoping to change that. Spatial, a New York-based VR platform for artists, is now offering a full-body avatar option in its app. It’s also going to let users bring in avatars created in Wolf3D’s Ready Player Meplatform, which uses selfies to generate realistic-looking, full-body cartoon avatars for games. Ready Player Me currently offers around 300 customization options, and Spatial says it will support all of them.”
This VR App Has Legs
“Aiming to speed the creation of immersive 5G-powered augmented reality (AR) experiences for smart glasses, T-Mobile has launched a T-Mobile Accelerator program that provides resources to selected developers… Games and videos employing AR are the focus of Krikey, which has already built several custom games for brand partners... Enabling 3D extended reality (XR) real-time content streaming is the goal of Mawari… The ability to blend games into the real world is delivered by Mohx-Games using both AR and virtual reality (VR).. ‘Shared presence communication’ is enabled by Pluto, which uses VR and AR to help people communicate as if they were in the same location…Immersive classrooms and campuses are delivered by VictoryXR”
5G-Powered Smart Glasses Enable Immersive Shopping, Gaming, and Learning
“Back in January, AT&T launched impressive speeds up to 5 Gbps with its fiber internet service in over 70 US cities. Now AT&T fiber is out with the news that it has successfully reached blazing-fast 20 Gbps symmetric speeds with its production network… While there’s no schedule for when the 10-20 Gbps symmetric speeds will launch for commercial customers, AT&T believes the 25GS-PON tech backing those advancements may be ready as soon as the next ‘6 to 12 months.’”
AT&T fiber hits 20 Gbps with ‘Hyber-Gig’ network test following launch of 5 Gbps for customers
“Nokia CEO Pekka Lundmark expects 6G mobile networks to be in operation by the end of the decade but he doesn’t think the smartphone will be the most “common interface” by then… he expects 6G to hit the commercial market around 2030, which coincides roughly with when Huawei expects to see the technology on the market… he thinks the world will move away from using smartphones to using smart glasses and other devices that are worn on the face, Lundmark said it will happen before 6G arrives… By 2030, Lundmark said he believes there will be a “digital twin of everything” that will require ‘massive computational resources.’”
Nokia CEO says 6G will be here by 2030 — but you might not access it via your smartphone
“The Next G Alliance says there are some major new areas for which 6G will be important, including robots and autonomous systems, truly immersive virtual reality and a physical world full of sensors.”
5G is so passé