5G is still 'in its infancy,' CIO says. Here's what could propel the rollout

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Fifth-generation connectivity may be here, but it’s still far from reaching its full potential, says one ETF manager.

The wireless network known as 5G has been rolling out slowly since 2019, with telecommunications giants AT&T and Verizon spending billions in February to buy key airwaves for running the next-generation service.

Excitement around 5G has also found its footing in the stock market. Defiance launched its 5G Next Gen Connectivity ETF (FIVG), which tracks shares of networking companies, satellite operators, cellphone towers, data centers and other tech plays, in March 2019. The fund is up 43% since launch and has over $1.1 billion in net assets.

Though Covid-19 accelerated the transition to 5G connectivity, it’s nowhere near over, Defiance ETFs’ chief investment officer, Sylvia Jablonski, told CNBC’s “ETF Edge” on Monday.

“It’s just in its infancy. It’s barely getting off the ground,” Jablonski said of the rollout.

Defiance lays out five key 5G applications in its investment thesis for FIVG: smart cars, smart power grids, smart health care, AI-assisted living and drones.

“Investments continue to grow in … carriers, cellular antennas, new radio tech, cloud capacity, cell towers, and I think all of these things coming together will essentially allow us to have a true globally shared economy and will lead to continued growth in 5G,” she said. “This is really the future of what communication will be.”

With carriers aiming to bring 5G to 5,000 U.S. cities by the end of 2021 — up from around 70 right now — that future may be closer than we think, Jablonski said.

“You obviously need a device that can use it, which in this case is the newest iPhone,” she said. “It just basically allows you to do things faster and more efficiently, share information quickly, watch videos, get texts, lower down times. But the bigger part of that is it allows things like researchers in oncology to share information within a minute that might impact a study or a new drug or an outcome of a surgery. That’s where it really matters.”

Chinese telecom giant Huawei said Tuesday it would begin charging smartphone companies for its patented 5G technology.

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