5G Investments To Continue Despite Global Recession Warning Amid COVID-19
Coronavirus (COVID-19) and its growing threat have made the investors rethink about the investments they are doing. Global markets have been shrinking and stocks plunged due to Coronavirus fears.
Although concerns over the global recession are growing due to the spread of Corona19, 5G mobile telecom investment is expected to continue the embers. Investors are unlikely to enter into a crunch due to early investment in major countries and intensifying competition among companies.
According to the telecommunications and related equipment industry, global 5G investment will expand this year. As concerns over the crunch stemming from the spread of COVID-19, countries began to use 5G investment as a response card. According to Investment News, Korean Telecom carriers will invest 4 trillion won in 5G in the first half of 2020. The companies have increased about 50% from the original 2.75 trillion won. Early investment was decided to stimulate the economy.
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China is also ramping up its 5G investment in line with new infrastructure investment plans. At the Central Political Conference held last month, it announced that it would accelerate the development of 5G networks and industrial Internet. On the 4th of this month, the Central Political Bureau of Commerce Committee announced the acceleration of 5G network and data center construction. China Mobile also announced its intention to build 300,000 base stations. There are some observations that coronavirus makes it difficult to achieve the plan.
In Japan, Softbank launches its first 5G service on the 27th, followed by NTT DoCoMo and KDDI. The plan to commercialize 5G in time for the Tokyo Olympics to be held in July was advanced about four months. In addition, Rakuten Mobile plans to launch 5G services in June, which is driving price competition and 5G investment competition.
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Moreover, The United States will invest $270 billion under the 5G Initiative Plan, record the largest frequency auction, and raise funds. Market uncertainties are growing as Apple is expected to delay the launch of the 5G model iPhone for up to several months due to sluggish demand and difficulties in parts supply, but it is unlikely that the investment in 5G infrastructure will be reduced.
Kim Hong-Sik, Hana Financial Investment Research Institute, said, “It is clear that Coronavirus is bad news in terms of 5G investment.“
Later, the governments with strong regulations, such as Korea and China, took the drive, and in Japan, Rakuten showed a business model that could take part in the market.
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