5G networks will fundamentally change the way media is transmitted, which means there's an expiration date on legacy cable and broadband providers. Fortunately, it's a profit opportunity for you, too.
"5G mobile TV will force cable companies to rethink how they sell video," said Amy Yong, an analyst with Macquarie.
But some cable companies just aren't doing that.
Altice USA's COO Hakim Boubazine downplayed 5G, saying, "We think it's a supplement [to broadband]."
Some still think 5G is just another shiny headline because they don't see the consequences of a change in the way networks are implemented and run. More than just being a "faster network," 5G will alter our infrastructure. It will profoundly affect how medical equipment is operated and push driverless cars to the mainstream.
But Comcast Corp. (NASDAQ: CMCSA) CFO Michael Cavanaugh calls 5G an "overbuild," saying, "We've faced that many times over in the past."
He's remembering the hardly-noticeable shift from 3G to 4G, which was merely a "faster" upgrade.
So either these cable companies don't know what 5G is, or they're doing their best to assure shareholders they'll stick around.
Comcast and its broadband peers don't realize they're in for a rude awakening, and investors will want to avoid their stock like the plague.
Today we want to make sure you know more about 5G than Comcast does; plus, we'll show you how you can profit from its mistake.
Why 5G Will Replace Cable
5G is the fifth generation of wireless networks (the "G" in 5G stands for "generation" ), which have evolved every decade or so since the wireless phone first appeared.
But 5G will change more about our world than all of them combined.
5G Is Coming: The Tech Breakthrough of the Century Could Rest on This $6 Stock - Get All the Details Here
Wireless customers are already used to the groundbreaking upgrades each new generation brings. The benchmark for 1G was simply wireless calling. 2G was texting. 3G was web browsing, media sharing, and essentially the foundation for what we know to be our smartphone experience. 4G set a new standard for the speed of all these functions.
5G is like having a fast, reliable wifi network wherever you are. You get a stronger signal and less lag than 4G, which means that whatever you are doing on the network, you can execute in near real time without waiting those few milliseconds for the machine to catch up.
That makes technologies like driverless cars and a fully connected Internet of Things (IoT) possible. The limited range and speed of connections right now are keeping a lid on those industries.
But what you'll notice right away is how 5G changes how you connect to the Internet.
It promises higher speeds without a wad of cables running all over the place. There will be smaller, more powerful connection points that are placed around cities and towns, so fewer towers will be needed to supply the signal. These points are called "M-Boxes." They are already installed throughout many cities, and they are what's going to usher in the $12 trillion 5G market.
The low latency of 5G will be ideal for AI and virtual reality technologies; communication with driverless cars and networked medical equipment will be more seamless. The entire Internet of Things (IoT) will erupt now that these devices can connect to the Internet from anywhere.
Of course, 5G will be faster too. 5G will be 10 times the speed of your standard cable provider, delivering 10 gigabytes per second compared to cable's 1 Gbps.
Microsoft Corp. (NASDAQ: MSFT) President Brad Smith wrote in 2018 that wired technologies take far longer to adopt than wireless, and 25 million Americans - 19 million of which are in rural communities - still don't have broadband access. With how easily it can communicate with cellular devices, 5G will get high-speed Internet to rural areas it's never been before.
As 5G completely reshapes the world's wireless connection, companies that don't - or refuse to - adapt just won't make it...
Why Comcast Is Toast in the 5G Market
One of Comcast's biggest problems its sheer size. The largest U.S. cable and home Internet service provider serves 40 states today, and no one is pleased.
A 2014 article from The Atlantic by Rebecca Rosen wonders if the company is "too big to even function."
Comcast has been the only game in town for decades, and its pricing behavior supports that. The Atlantic article cites another article from The Verge comparing the cost of the cheapest monthly Comcast cable deal in Portland ($79.99) to the same thing in Knoxville ($99.99) for 2014. And even to this day, the company is known to regularly raise prices over time arbitrarily.
But customers are forced to deal with Comcast's byzantine price structure and notoriously awful customer service because it might be their only way to access the Internet. Comcast is the only high-speed option for over 30 million Americans.
The company's take it or leave it approach to customer satisfaction is how it got ranked the "Worst Company in America" by Consumerist five years straight (2010 to 2019).
Last year, Comcast received an American Consumer Satisfaction Index score of 58 out of 100. The mean satisfaction rating for cable TV providers was 62. That number already tells an abysmal tale about the state of cable TV, and an even worse one about Comcast.
But the arrival of 5G will end Comcast's choke hold overnight.
Comcast might claim not to have its head in the sand, but it also doesn't seem to have much of a strategy for the rise of 5G. Comcast CEO Brian Roberts maintains, "There's nothing more reliable than a wire."
But the 5G threat to Comcast is very real. It's a network that can be accessed anywhere, at any time, at unprecedented speeds.
The speed of 5G alone should be enough to sink broadband providers like Comcast. But when you consider the way it's implemented, the different use cases it offers, and that Comcast is too gigantic to sense its market is being penetrated, you start to realize it's much more than a supplement. It's a revolution.
But other companies aren't so shortsighted. Here's one of the best 5G stocks to watch right now, plus an even more lucrative 5G opportunity...
The Stock to Watch in the 5G Market
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Verizon is a similarly huge telecommuniciations conglomerate. In fact, it's America's largest wireless provider. With everything going wireless, broadband providers will either be ousted or forced to play Verizon's game.
VZ will be delivering the first mobile 5G launch in the United States this year, in 30 cities, starting with Chicago and Minneapolis on April 11. The first 5G phone will be the Moto Z3 with the 5G Moto Mod by Motorola (a subsidiary of another leading tech stock, Lenovo (OTC MKTS: LNVGY), covered here).
The Chicago and Minneapolis launches will be the first time a 5G network is available for public smartphone access.
The 5G moto mod is a physical add-on that can be latched to the back of Motorola's latest hit Z3 phone. Of course, phones made after a certain date will have built-in 5G capability, but this is the first 5G smartphone capability on the market, and the partnership between these two notorious brands will benefit their visibility.
Investors are looking for companies like Verizon that are stable investments but also not afraid to get in on the ground floor of a movement. As Verizon continues buying into the 5G revolution, more investors will pick it up.
The stock trades for $59.71 per share. It has a price/earnings ratio of 15.39 in an industry with an average of 88 - which indicates the stock is significantly undervalued for its earnings potential. It has current earnings per share of $3.76, which could rise soon with the dawn of 5G. Whether or not that happens, careful investors can enjoy a nice dividend yield of 4.13%, more than double the S&P 500 average.
Over the next five years, analysts expect Verizon to grow 9.46% per annum, which is nearly triple the overall market growth rate expected according to Morningstar Research.
A bet on Verizon will be on 5G, and 5G will eventually support the infrastructure of the entire world. Comcast may not see that, but investors will.
For now, Verizon is still a leader in 4G, and you can enjoy its healthy dividend payouts until 5G networks get rolling.
5G Is Coming: The Breakthrough of the Century Could Rest on This $6 Stock
CNBC reports that this opportunity is worth $12.3 trillion... and it's gearing up to make an appearance all over America.
In fact, some of these devices are showing up right in your neighborhood - and I'm willing to bet you didn't even notice.
Our Silicon Valley insider mapped out all the details in this report.
About the Author
Mike Stenger, Associate Editor for Money Morning at Money Map Press, graduated from the Perdue School of Business at Salisbury University. He has combined his degree in Economics with an interest in emerging technologies by finding where tech and finance overlap. Today, he studies the cybersecurity sector, AI, streaming, and the Cloud.