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Network 5G, enhancement and threats: investment opportunities

Vanni Lanzoni, Global Financial Planner, Milan, 28/11/2019

The 5G, fifth generation network, will officially work from 2020 and, thanks to the constant
increase in bandwidth, will allow a huge number of devices worldwide to connect at a speed
never seen before, the realization of advanced projects such as the connected car, the Internet
of Things, the Smart City and the new generation Smart Home. A difference from what
happened with previous generations - 2G represented the transition from analogue (1G) to
digital telecommunications, and all subsequent developments (3G, 4G, 4G +) had as main
objectives the achievement of a speed of increasing connection and increasing spectral
efficiency - 5G will not only be a linear evolution of the previous one: you can announce an
innovative network platform for fixed and mobile ultra-broadband access, able to enable
services with heterogeneous requirements.

The development will be progressive and the real large-scale implementations will come,
however, only in the following years. A decade or so is the time it takes manufacturers and
operators to understand the needs of the market in the next future, develop technical solutions
and standardize them. Once this is done, the new generation is ready. Soon, everyone will be
connected within the same global technological system.

By 2020, mobile network traffic will be 30 times greater than in 2010 but it will not be the same
we know today, generated by smartphones and tablets: in fact, more and more machines and
sensors will be connected to the network for communicate and that will require a more efficient
and ubiquitous technology. The 5G standard allows the management of up to one million
devices per square kilometer, ensuring greater longevity of the device battery and enabling the
development of latest-generation services in real time, thanks to a reduction in latency that
brings it closer to zero. The 5G will therefore ensure the necessary capacity to cope with the
increase in wireless traffic generated by humans and machines.


The next 5G networks have the potential to blow up vertical industries, allowing the creation of
a wide range of new services, each of which will require new and variable levels of security.
Let me give you a few examples about what I mean.


* What could we do with our smartphone? The 5G will make it technically possible to use virtual
and augmented reality in our cities. Wearing appropriate viewers, we can visit ancient
monuments seeing their original architectural forms or walk in places far away thousands of


* In the health field. The 5G functionality will help, among other things, to speed up the file
transfer of a huge number of patients, remote surgery (e.g. the robot“winning” produced by
intuitive ISRG surgery) and the remote monitoring of patients through iot devices, already
existing, but being able to comunications that will not go beyond one thousandth of a second.


* In logistics management. Cities will be run down by autonomous vehicles will have to react in
a few milliseconds to the unexpected that animate our human driving experience. Cars, trains,
drones, planes that will drive themselves or assist the pilot.


In home automation. Household items, household appliances, factory machine tools,
inventory items in the shop and office will be connected, managed remotely, catalogued,
localised and able to tell us their degree of wear or the need for revision.


In personal health. Heart and vital parameters will be continuously monitored and analyzed
remotely by algorithms that will identify all risk factors.


Let’s think therefore of any service present in our life experience, the 5G will offer the possibility
of exchanging in very fast time huge amounts of data (“Big Data”) and to instantly subject them
to artificial intelligence algorithms by radically changing and improving it.


However, this progress is mitigated by the need for stronger and stronger security. Facing risks
that include medical identity theft, invasion of privacy on health and management of medical


In 2018, the Indian multinational Wipro Technologies, operating in the ICT sector, published a
report on IT security that raised concerns about 5G. The report lists the Internet of things (iot)
as one of the main routes of attack, since the 5G allows the iot to be much larger than the
previous networks. The future of communications will determine new 5G security
requirements, due to concerns about new usage cases and new network architectures.


* The aforementioned Wipro report states that the health industry was the target of 40% of
data breaches in 2017. It adds that the increasing use of iot devices will make the
management of growing cyber security risks more problematic.


* The threat of automotive cyber attacks will increase as autonomous vehicles become more
widespread. To counter this, the National Highway Traffic Safety Administration uses a multilevel
approach to computer security while approving driving assistance technologies.


* Intelligent homes will require stronger authentication methods, such as biometric
identification, seen in sensory software using voice and face recognition, or a host of
fingerprint access locks available in hardware stores.


I could go on endlessly in the list of all the improvements and threats expected and conceivable
in the new world of the 5G standard, but I would risk being boring. I shall therefore confine
myself to presenting a purely financial assessment of what I consider to be investment
opportunities resulting both from technological improvements and from the risks of the 5G

Il Taijitu (T'ai Chi T'u), representation of Yin e Yang.

We certainly understood that the new network, as well as the whole technological world related
to the internet, gives a point of view of the investments presents in itself the Taoist concept of
Yin and Yang (not necessarily of good against evil). Those who work in finance can make a profit
in both dimensions.


As far as the huge opportunities mentioned are concerned, we need to invest in funds and etfs
related to artificial intelligence, blockchain, biotechnology, nanotechnology, robotics.


As far as threats are concerned, it is plausible that the market assessments will benefit the
leading cyber security companies.

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Disclaimer: This article represents the opinions of the author and of the supervisor. No compensation is received for expressing these opinions. Here we declare, in addition, to have no commercial relationship with societies and research institutes cited in this article.


Note: shares are a highly volatile instrument, so they must weigh % within the portfolio consistent with the investor’s degree of risk. It is advisable to rely on a professional who can manage risk efficiently.

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