The Department of Telecommunications (DoT) has given approval on 4th May for conducting trial of 5G Technology in the coming 6 months. After successful trial of 5G network and its related services, the DoT is expected to auction the airwaves for the 5G network in Q1 of FY 22-23. Let's understand more about 5G Technology and the companies in India into this segment.
What is 5G Technology?
5G is the 5th generation mobile network. It is a new global awireless standard after 1G, 2G, 3G, and 4G networks. 5G enables a new kind of network that is designed to connect virtually everyone and everything together including machines, objects, and devices.
The new 5G standard is much faster and more responsive, and has much greater capacity, which will be a real breakthrough for the massive Internet of Things (IoT), and leveraging machine learning, artificial intelligence and to automate network management and security," he says.
Which countries have enabled 5G technology for consumers?
Commercially 5G network is active in 61 countries as per the latest report from Global Mobile Suppliers Association. Some of the countries which have enabled 5G technology for its users are Australia, Canada, China, South Korea, USA and other European nations.
What is the Expected Market size of 5G Tech Worldwide?
Currently there are investments going on in the 5G Tech in India. The market size of 5G Tech and related services world over amounts to USD 53 billion and is estimated to reach around USD 249.2 billion by the year 2026, more than any countries' GDP in a year.
1. Tejas Networks:
The company is into manufacturing of telecommunications equipments and has multiple licenses to export its product to various countries. The company has patented its products in 5G equipments.
As a sneak peek into its past year performance, the scrip of Tejas is standing nearly close to its 52 week high of Rs 221.5 from 52 week low of Rs 28.50 thus giving almost 10x returns from its life lows. Axis Securities recommends Tejas as a ‘Buy' with a target price of Rs 235 in its research report.
2. Tech Mahindra:
The company is in the Information Technology space offering its best expertise and skill-sets with IT enabled solutions to the Telecommunication Sector. The company's share price is expected to rise with the commercial launch of 5G services in India.
Covering 52 week performance of this IT Company, 52 week low was Rs 501.5 and 52 week high Rs 1081.25. Various stock brokers recommend to buy this stock such as Axis Securities, HDFC Securities, Nirmal Bang, Sharekhan, Geojit BNP Paribas with Target Price Range to Rs 1100 to 1140.
3. Indus Towers:
It is an merged entity between the group companies of Vodafone PLC and Bharti Airtel, formerly known to be Bharti Infratel. With majority holding of Bharti Group & Vodafone and global investors such as Canadian Pension funds this stock is bound to rally and can be next Hindustan Unilever (HUL) in its own sector, where it is in monopoly.
52-week performance of Indus Towers
The stock performance has been improving and its 52 week low was Rs 161.3 and 52 week high of Rs 282. The stock has given dividend yields of around 8% with total dividend payout of Rs 20.12 per share. The stock will enter into its growth stage while deploying tower infrastructure for the Telecommunications service providers (TSPs) which will be the main aspect to avail 5G services as the bandwidth requires 10x towers for stronger network without any failure.
4. Himachal Futuristic Communications Limited (HFCL):
The company has a listed track record of almost 30 years and more. This company provides telecom equipments. The company's share price is breaking out from previous 20 years low indicating a new higher price range for the company's share price. The scrip's 52 week low has been Rs 8.70 while 52 week high is Rs 38.90 The company has outperformed Sensex index by 202% to give almost 4X returns from its 52 week low. The company has recently announced Rs.0.15 dividend on each share.
5. Bharti Airtel:
It is a blue chip company forming part of Nifty Index holding around 36% of market share in the industry as a telecommunication service provider. The stocks 52 week performance is given as Rs 394 52 week low and Rs 623 52 week high. Axis Direct, Geojit BNP Paribas recommends to buy the stock for a target price of Rs 737. The company is set to rise with multiple tariff hike for our 4G prices. The company has started trials in specific regions for commercial launch of 5G services
6. Reliance Industries
Promoter company of Reliance Jio which has become a leader in telecom industry with oil to jio (mirror image) is raising market share and has most tech diversified company for implementation and deployment of smoother 5G services and its related services that is Internet of Things (IoT).
The company's performance over the last year i.e.52 week low of Rs 1393.65 and 52 week high of Rs 2368.8. The stock is recommended by many brokerage houses such as Prabhudas Lilidhar and Motilal Oswal with a target price of Rs 2330 indicating an upside of almost 20% from current market levels. Reliance Jio has the strongest balance sheet among its peer and will be leader to decide prices for 5G services commercially.
7. VIL(Vodafone Idea):
A company with the thirst for capital and investors for its longer term sustenance as a going concern, whose stock price tumbled post merger from Rs 30 to Rs 2 and then has given almost 6X returns is the 3rd largest telecommunication service provider. The company is amongst the group of four telecom service provider for conducting trial of 5G services. The company's 52 week has been Rs 4.19 while its 52-week high is Rs 13.8. The scrip has outperformed Sensex index by almost 22.5%. The share is lastly recommended by HDFC Securities for a Target Price of Rs 19 .
The company is into telecom equipments providing equipments to BSNL, MTNL and Defence. Now since there had been global territorial and pandemic issues with China the Indian government is promoting ITI for its various domestic telecom equipments' procurements. The company manufactures 5G enabled devices so as to smoothen the test trial of 5G deployment. The 52 week low for company is Rs 78.8 and Rs 151.6 is its 52 week high. There are no brokerages recommendations for this stock but as a major government company one can invest up to 5-7% of total investment in the 5G Investment Portfolio
9. Smartlink Holdings:
It's a company dealing in manufacturing as well as trading of telecom equipment goods through its subsidiaries Digisol Systems Ltd, Synegra EMS Ltd, Telesmart SCS Ltd. The company has its plants located in Goa. The company manufactures cabling and networking devices helpful in deploying 5G services. The company's share price performance in last year has been positive with 52 week low of Rs 61.4 and 52 week high of Rs 107.45. The company's current share price is Rs 90.8. The company is reducing its outstanding shares through tender buyback route continuously since last 4 years. No brokerage house gives buy recommendation for this stock
10. MTNL :
This is a government company providing telecom services in limited circles. MTNL has been granted permission to conduct 5G Trials for deploying these services commercially. Its 52 week low was Rs 6.68 and Rs 24.4 as 52 week high turning out to be a multibagger stock. No brokerage house covers this stock for recommendation.
11. Sterlite Technologies:
This company is Anil Agarwal Promoter Group company pioneering to fully 5G ready digital network solutions which help telcos, cloud companies, citizen networks and large enterprises deliver enhanced experiences to their customers. The company provides integrated 5G ready end-to-end solutions ranging from wired to wireless, design to deployment, connectivity to compute through core capabilities in Optical Interconnect, Virtualised Access Solutions, Network Software and System Integration.
The company has a strong global presence with next-gen optical preform, fibre, cable and interconnect subsystem manufacturing facilities in India, Italy, China and Brazil, along with two software-development centers across India and one data Centre design facility in the UK. The company's stock performance for past year has been Rs 91.45 as 52 week low and Rs 248.75 as 52 week high. Has a Hold rating from ICICI Securities as target price is achieved for the long term investors