In this article we will take a look at the 10 best communication stocks to buy now. You can skip our detailed analysis of the communications sector’s outlook for 2021 and some of the major growth catalysts for communication stocks and go directly to the 5 Best Communication Stocks to Buy Now.
The global communications sector initially consisted of just a few major players. It has now become a much more decentralized market as new opportunities emerged within the telecom industry. The industry has many functions involved including IT, construction, and AI which has opened up many business opportunities for communication companies to take advantage of. According to the Business Research Company, the telecom market size is expected to reach $3450 billion by 2022, growing at a CAGR of around 6%. This growth can be attributed to increasing development of smart cities and emerging market growth across the world.
Growth Catalyst for Communication Stocks: 5G
Perhaps the most important trend in the communications sector is the evolution of the next generation superfast 5G network technology which is already commercially available across 24 countries in the world through 40 mobile operators. Pioneering countries included South Korea, United States, Switzerland, China, and Kuwait. The major communication companies in the world such as Verizon Communications Inc. (NYSE: VZ), AT&T Inc. (NYSE: T), and Vodafone Group Plc (NASDAQ: VOD) are aiming to be on the forefront of the 5G revolution, capitalizing from the widespread adoption of the latest wireless technology. Verizon Communications Inc. (NYSE: VZ) has partnered with Ericsson L M Telephone Co (NASDAQ: ERIC) to help upgrade their core network and make it capable of managing 5G speed and communication upgrades. Other network providers such as T-Mobile US, Inc. (NASDAQ: TMUS) and AT&T Inc. (NYSE: T) are also leading the way in the 5G movement.
According to GSMA Intelligence, 150 million 5G network connections were established by the end of 2020. Billions of people around the world were confined to their homes after the pandemic and became reliant on wireless and broadband access. Digital transformation was recognized as the only way forward to alleviate the economic pressures of the COVID-19 pandemic.
5G has the potential to reshape the communications industry with significantly higher speeds and capacity which can allow huge amounts of data to be downloaded in a matter of seconds. Moreover, it will also play an important role by powering other technologies that will revolutionize travel, learning and innovation across the world. From the internet of things to smart homes, self-driving cars, telemedicine, virtual and augmented reality and everything in between, the wide-scale deployment of the 5G network will drive the reinvention of several businesses and consumer applications. An IHS Markit Ltd. (NYSE: INFO) report estimates that 5G will boost the global economic output by $12.3 trillion by 2035.
According to the Business Research Company, the adoption of advanced technologies and growing government initiatives during the pandemic have increased the scope and potential of the global telecom market. It is forecasted that the telecommunications market size will gain the most in China at $230.5 billion by 2022. Moreover, the top opportunities will arise in the wired telecommunications carriers’ segment which will gain $338.8 billion of global annual sales by 2022.
As digitalization is occurring across industries, there is a growing demand for connected devices, increased processing power, and wider network coverages which is driving the growth of the communications sector. Enterprises are deploying IoT to achieve cost savings and generate new revenue. Verizon Communications Inc. (NYSE: VZ) is providing businesses with Internet of Things connectivity in 170 countries worldwide. In 2020, 7.9 billion mobile connections are forecasted to increase to 8.6 billion by 2025….
Read More:10 Best Communication Stocks to Buy Now