Analysis: Historic Opportunity to Bring 5G to the United States Via Activism
With no significant domestic 5G vendor, the US is losing to international players like Ericsson (Sweden), Nokia (Finland) and Huawei (China). Therefore, we believe there is a strong case for an activist investor to bring 5G to the US by pursuing a suitor to acquire Nokia, which is available at a discounted valuation. With the right leadership, financial muscle, and US government backing, Nokia will make a formidable competitor and eliminate US concerns over the risk of losing the 5G struggle.The Edge View...
As all the major telecom carriers rush toward the deployment of 5G, the much-needed upgrade to a next generation Gigabyte speed is finally here. The network will be ready to do much more than just voice and data for communication and has the potential to transform the world, and the ability to handle large quantities of data will enable IoT growth. Telefonaktiebolaget LM Ericsson (ERIC) expects total IoT connections to grow at a CAGR of 24% from $8.6bn in FY18 to $22bn in FY24E.
Additionally, according to estimates, the 5G infrastructure market currently stands at $784m and is expected to reach $48bn by FY27E, growing at a CAGR of 67.1% during the period.
We believe the combination of artificial intelligence, machine learning and 5G represents enormous opportunity for businesses and governments to capitalize. As per estimates, Industrial Internet powered by 5G can generate new economic opportunities of $23 trillion by FY25E. Additionally, we expect healthcare, transportation and manufacturing sectors to be the key beneficiaries from the 5G revolution.
Nokia is an Internet and communications technology company based in Finland. Co.'s operations are focused on three businesses: network infrastructure software, hardware and services, which Co. offers through Networks; location intelligence, which Co. provides through HERE; and advanced technology development and licensing, which Co. pursues through Technologies. Co. maintains a global presence with operations and Researh & Development facilities located in Europe, North America and Asia, and sales in approximately 130 countries. Co. has an installed base of around 600 customers worldwide and these operators serve over 4 billion subscribers.
The Edge Group - Global Fundamental Catalyst Investing. The Edge provides investors with access to hidden corporate value from Global Special Situations using a pioneering approach to investments. Founded in 2005 by fund management and investment banking professionals to provide high quality, private equity-level research on Global Corporate Divestitures for the benefit of fundamental event-driven, growth and value-oriented investors in this difficult to track, but proven investment space.
The Edge will look to screen and analyze include Spinoffs; Reverse Morris Trusts; Squeeze Outs; Privatizations; Demutualization; Deep Discounted; Rights Issues; Rights Offering; Restructuring; Insider Purchases / Buying Change of Management / CEO Change; Deteriorating fundamentals; Post-Bankruptcy; Reorganization; Tender Offer; M&A Deals; Secondary Offering; Share Swap; Thrift Conversions; Share Buybacks; Activist; Mergers. All analyzed from a fundamental point of view.
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