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The super speeds, increased bandwidth and decreased latency that 5G – the fifth generation of mobile telecommunications technology – brings will drive transformational enterprise and consumer technology innovations over the next five years. Despite some challenges with supply chain delays and labor capacity brought on by the COVID-19 pandemic, immense infrastructure updates and public and private investment are mounting to make 5G connectivity available in more places and to more people.

During the KeyBanc Capital Markets (KBCM) “Future of Technology” series, John Vinh, managing director, equity research analyst, and Brandon Nispel, vice president, equity research analyst, of KBCM, led a conversation with experts in wireless communications infrastructure and signal processing about the 5G evolution. The panel included:

  • Ed Knapp, SVP, Chief Technology Officer, American Tower Corporation
  • Dan Leibholz, Chief Technology Officer, Analog Devices
  • Rick Suarez, Head of the Wireless Division, MasTec, Inc.

Is the COVID-19 pandemic slowing down the worldwide 5G race?

The short answer is: not much. Suarez said that from a production and installation perspective, the pace of work hasn’t slowed down. His firm has had two strong quarters of builds nationwide and in Mexico. Minor delays are being caused by the pandemic’s impact on the supply chain and parts manufacturers overseas. However, the pandemic – and the shift to remote work– is increasing demand for more infrastructure to include suburban and exurban, rural areas.

Outside North America, Leibholz says 5G deployments in China are accelerating to meet the inexorable demand for more data. “4G was not strong enough for the incredible use of technology in the country.” Meanwhile, he notes Japan and Korea have experienced a pause in deployments, mainly due to financial constraints, but expects those to be temporary.

Knapp adds that the pandemic caused a slowdown in Europe; however, the wireless industry is powering through, as increased connectivity is a fundamental component of meeting people’s needs, especially as more people are working and learning from home.

The panelists agreed that 2020 has been quite a strong year for 5G deployment overall, and the pace will only accelerate in 2021 and beyond.

Low-band, Mid-Band and High-Band: Is there a Goldilocks solution for 5G?

5G networks are achieved through a mix of different spectrums or bands: low-band (wide breadth of coverage, but speeds are only 20% faster than 4G); high-band, AKA millimeter wave 5G (very fast, but short-distance towers that can have difficulty with transmitting through hard surfaces); and mid-band or somewhere in-between low-band and high band (medium coverage range with faster speeds than low band).1

Leibholz explained that from his firm’s perspective, “We’re somewhat agnostic and have a flexible architecture.” He added that millimeter wave is a very different and augmenting type of powering that customers would experience as like “being directly plugged in,” and that he believes devices will change to take advantage of that. However, the coverage area is a drawback.

“All spectrum is good spectrum, but from my perspective mid-band is the sweet spot,” said Knapp.

Yet, he also believes millimeter wave has some compelling use cases in dense urban centers and public gathering spaces, such as stadiums or concert venues. For example, Verizon Wireless has focused on sporting events, establishing 5G in 13 NFL stadiums.2

The other panelists agreed that mid-band has momentum behind it because of its blend of coverage and capabilities, as well as the buzz about a planned mid-band spectrum auction by the Federal Communications Commission (FCC) later this year.3

What’s propelling the demand for 5G – and what’s to come?

The move from 3G to 4G was largely consumer device driven. Consumers wanted to tap into the capabilities of their smartphones and other devices on the go. With 5G the script has flipped, and experts in the telecommunications sector believe 5G will drive tremendous innovation in consumer devices, the growth of “smart” city and Internet of Things (IoT), and eventually applications and software in the business sector.

As for nearer term impact, the explosion of remote work and video conferencing for both professional and personal “gatherings” has exposed the need to bring faster networks and reduced latency to people in their homes.

“Imagine the opportunities and what could be possible if your device was 100x faster, if the network was 100x faster and more reliable,” said Leibholz.

By 2025, incremental improvements in capabilities through 5G will give way to true transformation of how and why people use the network. The panelists predicted growth in augmented reality and virtual reality (AR/VR), wearable devices perhaps even surpassing smartphones, drones and remote monitoring, autonomous vehicles and smart grids in cities, virtual healthcare and telemedicine, industrial uses such as automation in factories, and more.

The big winners in telecommunications will be companies that do complex installations with economies of scale, integrated service providers, and cloud-based solutions that allow enterprises to harness the power of 5G.

For more information, reach out to KeyBanc Capital Markets John Vinh, Managing Director, Equity Research Analyst and Brandon Nispel, Vice President, Equity Research Analyst or visit key.com.

About the Future of Technology Series

This inaugural seven-week virtual series centered on timely and unique content across the Technology landscape. Leaders from today’s most relevant technology names gathered to take a thematic approach toward exploring market shifts, particularly in light of an increase in digital acceleration, remote work, deglobalization and changing consumer consumption habits. Attendees included more than 900 investors, 164 private and public companies, with 115 fireside chats and panels, and more than 700 one-on-one meetings.

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