U.S. stock markets have remained highly volatile so far this year. Lingering trade conflicts between the United States and China, an impending global economic slowdown, inflationary concerns, possibility of another rate hike by the Fed and several geopolitical issues are the primary reasons behind the market instability.
However, the wireless infrastructure industry maintained its bull run despite the ominous circumstances, surprising many investors. Growing demand for real-time voice, data, and video has encouraged wireless operators to upgrade their networks. This, in turn, has provided a boost to the demand for wireless infrastructure developers. Consequently, it will be prudent to invest in wireless infrastructure developers stocks with a favorable Zacks Rank.
Strong Wireless Infrastructure Market
With the rapid growth in video and other bandwidth-intensive applications, the wireless industry participants are making considerable investments in LTE, broadband, and fiber in order to provide additional capacity and ramp up Internet and wireless networks. The LTE network has the highest penetration rate of 91% in the North American region. This, in turn, will aid the wireless equipment manufacturers.
The impending 5G boom is likely to propel the wireless industry to newer heights. The success of 5G technology hinges on substantial investments to upgrade infrastructure in the core fiber backhaul network to support anticipated growth in data services.
In this regard, Internet of Things (IoT) has the potential to emerge as the numero uno factor for future growth in the space. Statista’s 2018 report on global telecom estimates that global telecom services revenues will reach around $1.5 trillion in 2019.
Two Primary Growth Drivers
The Trump administration has lowered the corporate tax rate from 35% to 21%, marking its lowest in 78 years. Government’s tax cut resulted in a huge windfall for wireless operators. The carriers can utilize this money for 5G network R&D and its deployment. This will naturally bolster demand for wireless infrastructure.
