The 5G rollout is coming and recent development on both the local and national stages indicate that it is only a matter of time. While Verizon, T-Mobile and AT&T have already launched their partial 5G networks, President Biden has demonstrated his commitment in his recently announced national Infrastructure Plan.
The Plan clearly designates the US’s leadership in 5G and digital infrastructure of national importance. While the President has promised $300 billion investment in all facets of manufacturing, one sixth of this funding is assigned to reducing the U.S’s reliance on overseas semiconductor manufacturers. Semiconductors are an essential element for wireless network providers’ ultrafast 5G networks, and Biden’s move is a bid to ensure US independence in this vital component. In addition to this $50 billion, the Plan also commits to $100 billion investment in providing 100% broadband coverage across the nation, increasing transparency and competition among internet providers and ensuring every American has access to affordable, reliable and high-speed internet service.
Right here in Santa Clarita, our City Council are also taking the appropriate measures to ensure that we are best positioned in the expansion of 5G. Last month the council approved an agreement template to allow it to authorize access for telecom providers to individual City-owned poles.[1] This follows a decision at the end of 2019 to allow for the deployment of small cellular facilities within the City public right-of-way. So how and why do individual poles in Santa Clarita contribute to the nationwide project to secure the US’s leadership in 5G? The answer lies in an understanding of the significance in 5G technology for its transformative potential and economic prospects.
What is 5G?
5G is the bundle of technologies that support unprecedented connectivity, of devices, people and vehicles. If 1G was the first cell phone that allowed us to place calls as we moved around, 2G was when we added text messages and 3G enabled internet browsing via the phone. 4G again felt revolutionary as our cell phone sped up and could be used to stream videos or play games on the move. However, 5G is not merely a faster 4G and its impact will not be confined to the cell phone market. It is an enabling technology that could transform how we work, live and pursue leisure. It’s a network of thousands of small cell antennae combine with beamforming and Multiple Input Multiple Output cellular antennae stations, to reduce latency, slice the network into segments and allow mission critical services to be operated over a wireless internet. 5G will empower the Edge, which brings processing power and data storage closer to the devices. This improves response times, saves bandwidth and promotes seamless connectivity.
5G can thereby support smart cities, smart factories, smart driving and the Internet of Things, which will see billions of devices connected, communicating and coordinating to optimize our lives behind the scenes. Remote surgeries, eSports and virtual/augmented reality could all be facilitated and enhanced by 5G connectivity. In the gaming industry, 5G is already opening up new possibilities in terms of design, scope and monetization.
Local and National 5G Economic Potential
If 3G boosted GDP by 15%, and 4G by around 27% due to its introduction of apps, 5G could drive GDP growth of 40% or more by 2030.[2] This growth will be boosted by new revenue streams, new synergies and industries that could be enabled by 5G. While 5G stocks are already reflecting investor confidence, we don’t even really know how far this could go. What Biden’s Infrastructure Plan and Santa Clarita’s City Council have in common however, is a recognition of the importance of preparing for and trailblazing towards the 5G future. With government support from above and State and City-level action from below, the 5G rollout beckons next generation connectivity.
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The possible applications of 5G technologies are only in the exploration stages, and the possibility of returns is uncertain and may not be realized in the near future.
The Defiance Next Gen Connectivity ETF is the first ETF to emphasize securities whose products and services are predominantly tied to the development of 5G networking and communication technologies. The fund does this by tracking The BlueStar 5G Communications Index. The Fund attempts to invest all, or substantially all, of its assets in the component securities that make up the Index. “The BlueStar 5G Communications Index™”, “BFIVG™ Index” (collectively “5G Communications Index”), is the exclusive
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