Nokia win with T-Mobile solidifies 5G infrastructure spending outlook

Nokia win with T-Mobile solidifies 5G infrastructure spending outlook

So far this earnings season we’ve heard positive comments for the outlook for 5G network spending, particularly in the US. That’s the forward view, but the for actual spending in 2Q 2018 was a little different as Digital Infrastructure companies that sell 5G components to mobile carriers didn’t deliver robust growth. As we’ve seen before, network construction is a bit of a slippery thing, but as we get closer to the publicized launch date, activity picks up big time. With a 5G network race in the offing inside the US, we see the 5G agreement between Nokia and T-Mobile US kicking off what is likely to be a series of similar announcements in the coming weeks and months. Odds are AT&T and Verizon will not want to be viewed as lagging behind T-Mobile. Good for 5G infrastructure-related companies and those who serve them as well as the ones that build the actual network.

T-Mobile US (TMUS.O) named Nokia (NOKIA.HE) to supply it with $3.5 billion in next-generation 5G network gear, the firms said on Monday, marking the world’s largest 5G deal so far and concrete evidence of a new wireless upgrade cycle taking root.

No.3 U.S. mobile carrier T-Mobile – which in April agreed to a merger with Sprint (S.N) to create a more formidable rival to U.S. telecom giants Verizon (VZ.N) and AT&T (T.N) – said the multiyear supply deal with Nokia will deliver the first nationwide 5G services.

5G networks promise to deliver faster speeds for mobile phone users and make networks more responsive and reliable for the eventual development of new industrial automation, medical monitoring, driverless car and other business uses.

Source: Nokia, T-Mobile US agree $3.5 billion deal, world’s first big 5G award

About the Author

Chris Versace, Chief Investment Officer
I'm the Chief Investment Officer of Tematica Research and editor of Tematica Investing newsletter. All of that capitalizes on my near 20 years in the investment industry, nearly all of it breaking down industries and recommending stocks. In that time, I've been ranked an All Star Analyst by Zacks Investment Research and my efforts in analyzing industries, companies and equities have been recognized by both Institutional Investor and Thomson Reuters’ StarMine Monitor. In my travels, I've covered cyclicals, tech and more, which gives me a different vantage point, one that uses not only an ecosystem or food chain perspective, but one that also examines demographics, economics, psychographics and more when formulating my investment views. The question I most often get is "Are you related to…."

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