Wireless companies have invested heavily in 5G wireless networks, but investors believe they will not see the expected return on these investments. Keith Snyder, senior equity analyst at CFRA Research, discusses why 5G hasn’t had the impact wireless companies expected.
Snyder points out that these days, just providing connectivity isn’t enough. 4G connectivity used to be a key selling point, but as more competitors have entered the market, 4G connectivity has now become a “service game” for wireless companies. Snyder emphasized that companies need to redefine their business models while also showing customers “what they can offer” because “people aren’t interested in 5G per se.”
Snyder said companies are looking to monetize 5G by offering the service on top of their wireline broadband operations. But companies with established broadband businesses like AT&T (T) and Verizon (VZ) “need to be very careful” about which markets they introduce these services to. This approach could also lead to “congestion problems.” “Many customers use the same connections in the same markets.
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Editor’s note: This article was written by angel smith
