Role of Technology in Todays Digital Transformation: 5g Technology Stocks Worth the hype?

  • October 19, 2020 11:04 PM NZDT
  • Team Kalkine
Role of Technology in Todays Digital Transformation: 5g Technology Stocks Worth the hype?

Summary

  • Demand for data increased exponentially as people started working from home during the lockdown period.
  • Spark New Zealand (NZX:SPK) has released a three-year strategy to capitalise on the growing markets of broadband, wireless, and cloud, and three future growth markets that are digital health, IoT and sport.
  • Telstra continued to increase its customer base in FY20 and have refreshed plans for mobile customers which also include 5G in most plans.

While various sectors have been hit heavily by the COVID-19 lockdowns, technology companies continued to provide safe haven to customers and safeguard their earnings. The change to remote working in several parts of the world, preference for online entertainment and education and need for telemedicine have proven technology’s role as an important lockdown survival tool.

The COVID-19 pandemic showed how good internet access allowed people to earn, learn and live well. Even though the seven weeks lockdown affected the New Zealand economy adversely, the situation would have been worse if the working population were not able to depend on their fixed and mobile services to continue to be productive.

Demand for Data Skyrocketed in Lockdown Period

When the country went into lockdown on 25 March 2020, the demand for data skyrocketed and voice calling grew exponentially. Overall data usage went up at all hours, but in particular during the workday. As per the data released by Chorus, during Alert Level 4 its networks witnessed daytime traffic to go up to 85% and evening traffic jumped up to 40%.

The role of 5G technology has been instrumental in supporting the technology sector that allowed businesses to innovate and use previously out of reach technologies than ever before.

On that backdrop, let us look at few 5G technology stocks in New Zealand.

Spark New Zealand Limited (NZX: SPK)

Spark New Zealand Limited is a supplier of digital services and telecommunications in New Zealand and operates through three segments: Spark Home, Mobile & Business; Spark Digital, and Spark Connect. The company is capitalising on the 5G technology by offering a 5G network to meet customers’ rising data need.

Spark Releases its Three-Year Strategy

The company has released its three-year strategy for the time period covering FY21 to FY23. The new strategy is mainly focused on Spark’s established markets of broadband, wireless, and cloud, and three future growth markets that are digital health, IoT and sport.

The strategy also focusses on three major important areas:

  • Improving the company’s own sustainability performance;
  • Lifting digital equity; and
  • Supporting the country’s transformation and economic recovery.

Telstra Corporation Limited (NZX: TLS)

Telstra Corporation Limited is a telecommunications and technology company that offers a full range of communications services.

Telstra continues to increase its customer base in FY20, in spite of a challenging and competitive market. It announced a refreshed plan for mobile customers which included increased data allowances and saw 5G included on most plans. The company has decided to pay a fully franked final dividend of 8 cps, comprising a final ordinary dividend of 5 cps and a final special dividend of 3 cps bringing the total dividend for FY20 to 16 cents per share.

 

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