Christmas has come early for the bank’s shareholders with the decision to slightly increase the 2024 dividend – despite a single-digit decline in the net profit and cash earnings.
Beating the market benchmark is never easy, with 72 per cent of Australian actively managed global equity general funds trailing the S&P World Index in the six months to June 30, 2024. Domestic equity funds performed slightly better, albeit against a significantly lower bar set by the S&P/ASX 200 Index.
The future is 5G
With the onset of COVID-19 and the lockdowns that followed, the move to digitisation became one of necessity rather than choice. Traditional bricks-and-mortar retailers shifted online, triggering a frenzy of buy-now, pay-later (BNPL) vendors offering solutions to eventually replace physical cash. And quietly working in the background is the backbone supporting this transition: 5G. In this article we will take a closer look at the technology, its functionality and three ways to gain an exposure.
The next generation of high-speed mobile data is known as 5G, or “fifth-generation.” Currently being rolled out in Australia, 5G is the next generation of mobile network technology and is a lot faster than its 4G predecessor. Telstra and Optus 5G networks are currently available while Vodafone’s network is being rolled out. According to The Internet of Things (IoT) World Congress, 5G reportedly works 20 times quicker than 4G, a defining feature that opens the door to a whole new world.
The world, business and lifestyle, of the future has already been defined; it is connected. Almost every aspect of our lives will be connected: whether it’s via smart phones, digital payments, or smart homes, our lives are about to get even easier. There are three key companies offering an exposure to the technology on the ASX:
The infrastructure
5G Networks (ASX:5GN)
An unquestioned beneficiary of 5G technology.
The company specialises in data connectivity, cloud and data centres all working together to give clients a seamless experience. The company offers managed services in the business to business segment and cloud-based services.
5GN owns and manages a high-speed infrastructure network it calls the “managed data network (MPLS).” Connected via 100GB links to more than 100 data centres across the country, it’s able to provide clients with a cloud platform and inter-connected digital services.
At the company’s FY21 strategy outlook 5GN said it was progressing with its on-net fibre expansion to connect over 80 data centres across locations in Melbourne, Sydney, Brisbane, Adelaide & Perth. With 5G and its faster data transfer speeds, higher bandwidth and lower latency, comes an exponential growth in data-intensive applications such as Zoom conferencing, video streaming and Internet of Things. Quicker speeds mean more data. More data means more data centres. Building and acquiring new data centres is an integral backbone required for 5G and 5GN is all over it.
Recently the company acquired a former Pipe Networks data centre in Brisbane increasing its total capacity to more than 1000 racks across Australia, expanding its 5G Cloud solution geographically. 5GN has also recently announced that it will proceed with its takeover of Webcentral Group (ASX:WCG) which is the former Melbourne IT Group. With the addition of Webcentral and combined synergies of over $7 million a year, this acquisition is tipped to be “transformational” for 5GN’s earnings.
Name: 5G Networks (ASX:5GN)
Market Cap: $175 million
Price: $1.57
The upstart
With faster bandwidth comes a new and exciting way to communicate with devices called the Internet of Things (IoT). This is a network of physical devices or ‘things’ that can connect and exchange data with other devices over the internet. They connect using wireless communications to a nearby hub that will process its sensor data to provide control and larger scale data processing over the network. IoT paves the way for the introduction of driverless cars, as instant control responses are essential for instant reactions to road conditions. Devices that can communicate with other devices are referred to as “smart devices.”
Connected IO (ASX: CIO) – Is an ASX listed, Silicon Valley based IoT device manufacturer.
In the multi-trillion-dollar global IoT market the company supplies reliable devices to the Drones, Energy Management, Surveillance, Security, Oil & Gas, Robotics, Digital Signage, and Industrial Machinery markets just to name a few. It specialises in technology for machine-to-machine connectivity and has already lined up some heavy-hitting customers such as Coca Cola, Verizon, and AT&T. Such IoT devices can enable real-time video streaming in commercial vehicles such as trucks and buses. CIO’s product range includes collision sensors, temperature sensors, cargo sensors, and artificial intelligence devices that report data in real time. Its focus is on the fast-growing automotive IOT space and it has quickly become a significant player in the hybrid and fully electric vehicle market.
CIO predicts that the pool of connected IoT devices will increase to 42 billion devices by 2025, with the majority of growth a result of new machine connections. These commercial applications will include factories and industrial equipment including robots, healthcare devices, agricultural and mining machines and construction applications. Connected IO’s innovative and partnering approach has positioned it nicely to capitalise on the IoT sector as it evolves and matures.
Name: Connected IO (ASX: CIO)
Market Cap: $5 million
Price: $.022
The stalwart
Telstra (ASX:TLS) – And of course, the telecommunications giant behind the rollout and construction of 5G is Telstra. With about one-third “of the Australian population” covered, that figure will grow to 75% by June next year.
CEO Andy Penn said “5G will take the activities we have all had to suddenly grow used to doing digitally during COVID – telehealth, working and studying from home, eCommerce – to a whole new level. Imagine being able to join meetings or classrooms from home using virtual or augmented reality. Imagine wearable tech that generates health data in live-time so your doctor can spot any medical issues before you even know you have them. Imagine a connected, seamless lag-free experience across multiple devices and settings, from your home to your car to your study or home office. Imagine fleets of autonomous drones able to deliver your groceries, books, supplies, whatever.”
With 5G critical to Australia’s future prosperity, Telstra is a global leader in this new technology and has the expertise to get the job done. Telstra’s 5G is already rolling out in 53 cities and regional towns across Australia. More than 10 million Australians now live, work, or pass through Telstra’s 5G network footprint every day. This puts Telstra in an enviable position well ahead of its competitors and should pave the way for a much-needed boost in its share price.
Name: Telstra Corporation (ASX:TLS)
Market Cap: $37 billion
Price: $3.12
