KPMG professionals have carried out a detailed analysis of the strategies based on public communications of the world’s 14 largest telcos, and gathered the reactions of the investor community via a 5G Investor Survey circulated in 2019. We’ve also spoken to leading figures in both camps.
First the good news.
A significant proportion of investors (44 percent) believe 5G will underpin Industry 4.0 – and the remainder are neutral. They appreciate 5G is more than the previous evolutions from 2G to 3G to 4G.
But none of the investors surveyed are fully convinced of the true value of 5G. And none are confident 5G can deliver positive financial benefits within their investment timeframe.
They’re also uncertain whether telcos’ 5G capex envelope will be large enough to meet demands. And they question whether a traditional, consumer-led approach to 5G can deliver the necessary ROI.
They’re especially worried about pricing. With 5G often being introduced at the same price as 4G, there are concerns that fierce competition will keep margins low and restrict revenue growth.
This skepticism is reflected in sector share prices, which are below the S&P 500, with declining PE ratios globally.