[Click eStock] "If Trump Wins, 'Domestic Telecom Equipment' Benefits"

According to an analysis from the securities industry, if the Republican candidate Trump succeeds in his re-election in the upcoming U.S. presidential election this November, it is expected to have a positive impact on the domestic telecommunications equipment industry.

[Image source=Yonhap News]

On the 31st, Kim Hong-sik, a researcher at Hana Securities, said, "It is unlikely that the U.S., which already holds AI (Artificial Intelligence) supremacy, will take a passive stance on IoT supremacy. Especially under a Trump administration, the introduction of advanced 5G will be expedited."

Researcher Kim explained, "In 2018, 5G emerged as a core infrastructure of the 4th industrial revolution and became a key issue in the U.S.-China trade dispute, eventually leading to sanctions against Huawei. There is a high possibility that the global competition for 4th industrial revolution supremacy will be reenacted by the end of this year. This is because the true realization of the Internet of Things (IoT) is likely to come after 'advanced 5G' (an intermediate stage transitioning to 6G)."

Accordingly, the global information and communication technology (ICT) supremacy competition centered on Korea, the U.S., and China is expected to intensify. Kim said, "American companies providing innovative services in AI will attempt to dominate the IoT market through 5G investments. AI acts as the brain, 5G as the blood vessels, and IoT as the arms and legs, and the global competition for 4th industrial revolution supremacy centered on the U.S. is expected to begin in earnest." Huawei is also expected to release advanced 5G equipment within this year. Early next year, China Mobile and Unicom plan to commercialize advanced 5G services.

The additional 5G frequency auction is also a point of focus. Researcher Kim analyzed, "As AI combines with IoT, traffic is expected to surge, and telecom companies will demand rate increases. The government will allow rate hikes on the premise of new frequency investments, and ultimately, next-generation network investments will be a boon for the telecommunications equipment industry."

He added, "Although delayed more than initially expected, the additional 5G frequency auctions in Korea and the U.S. will be major events. They are expected to take place by the end of this year or early next year, and if large-capacity frequencies are won, it will brighten the performance outlook for domestic telecommunications equipment companies." He continued, "Although the traffic growth phenomenon is slowing this year, considering the usage period, global telecom companies are likely to participate in the auctions. To overcome poor performance, they are expected to launch next-generation rate plans along with new frequency investments." He emphasized, "Attention should be paid to Solid, which continues a recent earnings surprise streak, and to RFHIC and Innowireless, representative stocks of the oversold sector·KMW."