The breakneck race to 5G isn’t cheap. A new report from credit-rating agency Standard & Poor’s cautions investors it could take a while for wireless companies to start to see profits from the next-generation Wi-Fi network.
“For U.S. telecommunications companies, we have a cautious view on 5G wireless and believe that accelerated deployments could hurt balance sheets that are already stretched because of mergers and acquisitions, mature industry conditions, and competitive pressures,” S&P analysts Allyn Arden and Madhav Hari said, according to Investor’s Business Daily.
They add wireless companies like AT&T and Verizon, will have to wait for at least five, and up to 10, years to start to see revenue from its 5G investments.
“We believe the near-term primary 5G growth driver will be in the form of new machine-to-machine connections,” the report says.