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Hurry Up and Wait: Craig Moffett on 5G’s Long Road to Relevance - Barron's

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Telecoms are making a big deal about 5G’s long-awaited rollout—but will consumers notice? “If you stripped away the marketing buzz around it, my guess is the value proposition for consumers is still quite a few years away before it reaches the level of relevance,” said Craig Moffett, a founding partner of research boutique MoffettNathanson, speaking at Barron’s recent Investing in Tech Conference, a virtual event series currently running through July 15.

5G refers to telecom standards that feature low latency, many simultaneous connections, and “potentially, at least, very, very high speeds.” But combining speed and coverage involves a trade-off: “If you’re going to use an 800 megahertz-wide block of spectrum in superhigh frequency, you’ll get extraordinarily high speeds. The problem is that it won’t propagate very far, so you’ll get it only over very short distances,” in venues like stadiums, arenas, and airports, Moffett said. In rural areas, “you’re going to go to very low-frequency spectrum.” And then you lose speed.

No one has combined the two. “You can either get very good coverage from networks like T-Mobile ” but at speeds close to 4G, or very high speeds like Verizon Communications with almost no coverage. Moffett likes T-Mobile’s prospects. The Sprint deal “brought them a lot of midband spectrum, and it’s really going to be midband spectrum that defines the user experience of 5G,” he said.

He compared 5G to HDTV, which took off two decades after standards were set. “I’m not suggesting it’s going to take 20 years for 5G to matter in wireless,” he said. But there aren’t many 5G applications. And before they can evolve, you need a network deployed.”

Last Week

Recalculating

Stocks rallied early in the week after the Federal Reserve said it would expand its bond buying, retail sales revived, and news of a promising steroid emerged for severely ill Covid-19 patients. Stocks, however, then wavered on renewed virus fears. On the week, the Dow Jones Industrial Average rose 1%, to 25,871.46; the S&P 500 advanced 1.9%, to 3097.4; and the Nasdaq Composite soared 3.7%, to 9946.12.

Debating the Data

Economic data displayed some life, notably in retail sales, which rose 17.7% in May over April, a record. Manufacturing showed much lower gains and the Cass freight index remained at a recessionary low. Fears of another Covid-19 surge persisted: Cases rose in more than 20 states, Utah, Oregon, and Miami paused reopenings, and New York Gov. Andrew Cuomo threatened to close New York City and the Hamptons after “rampant” violations of social distancing guidelines. Beijing and Tokyo also saw spikes. The president blamed rising numbers on more testing, and planned a rally in Tulsa, which local health officials opposed. The U.S. death toll neared 120,000.

A Long March

An African-American was killed by an Atlanta policeman after falling asleep in a Wendy’s drive-in. The death led to the firing of the officer, later charged with murder, the resignation of Atlanta’s police chief, and the burning of the Wendy’s. In Washington, the parties struggled to agree on police reforms. President Trump announced an executive order urging improved police practices and federal prosecutors charged some supporters of boogaloo, a far-right movement for violence. Protests surged on Juneteenth, June 19, marking the end of slavery in the U.S.

Supreme Surprises

In a surprise 6 to 3 decision, the Supreme Court decided that the Civil Rights Act of 1964 should apply to sexual orientation. The bottom line: Members of the LBGTQ community can’t be fired because of their sexual orientation or gender identity. Separately, the court rejected appeals to take up the issue of qualified immunity for police and various gun rights cases. In another surprise, the court by 5 to 4 upheld protections under the Deferred Action for Childhood Arrivals, or DACA, program.

Book Club

The Justice Department moved to block publication of former national security adviser John Bolton’s book, saying it contains classified material. The book, in which Bolton calls Trump “stunningly uninformed” and claims foreign policy was politicized, has already been printed and distributed. Justice officials also want to seize Bolton’s book earnings.

Taxing Tech

Treasury Secretary Steven Mnuchin declared an “impasse” in talks with France, Italy, Spain, and the U.K. over a so-called digital tax on mostly U.S. tech giants. The four refused to back down, raising the possibility of a trade and tariff dispute.

Email: editors@barrons.com

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