5G technology is the next big step for communications technology. It may take some time for all the infrastructural investments by major industry players in the technology to pay off. However, 5G is the future of telecom, and the market is ripe with upside opportunities for the investors who can make the right bets in the 5G space.
Drastically improved data speeds and much lower latency through 5G provide internet users better and faster interconnectivity. Various Canadian companies are gearing up to bring this technology to mainstream use, and Rogers Communications (TSX:RCI.B)(NYSE:RCI) is paving the way.
While Rogers is currently not the biggest among the Canadian telecom industry giants, it could be a much better long-term pick for 5G bulls.
A substantial acquisition deal
Rogers Communications is currently working to pull off a massive $20 billion takeover bid for Shaw Communications (TSX:SJR.B)(NYSE:SJR). This is undoubtedly a significant move for investors, because it is leading to plenty of optimism for Rogers Communications.
This deal could allow Rogers to speed up its 5G roll out much faster than other industry giants. Acquiring Shaw Communications could also allow Rogers to expand its operations in Western Canada — a move that would have required substantial infrastructural investment before the move.
When the deal comes through, Rogers will effectively overtake Telus as the primary competitor for the market-leading telecom giant BCE. Investors in Rogers Communications could be in for massive upside, considering the potential size of the company once the takeover deal is complete.
Analysts and investors alike are buzzing at the potential value this deal could generate once it pulls through.
A deal that is yet to be complete
Despite the optimism surrounding the move, investors may need to be wary of the speculation about whether the deal will even materialize. This is a massive takeover move, and if it materializes, it will become a game changer for the Canadian telecom space. The acquisition could spark a regulatory review to ensure that the competition is fair in the industry.
Canada has a reputation for a relatively lenient regulatory process than many other countries. There have been several instances when regulators have given the go-ahead to big deals that are similar to this one.
It remains to be seen whether the deal will take place. The situation seems favourable for the Shaw Communications acquisition to come through and for Rogers Communications to become an even more significant presence in the Canadian telecom sector.
The race to supremacy for the 5G revolution is well underway. Now would be the ideal time to start considering the best possible bets to make a play for this lucrative space. If you believe that the Shaw Communications deal will take place and position Rogers Communications on a more even footing with BCE, the stock could be an excellent pick for your investment portfolio.
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This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.
Fool contributor Adam Othman has no position in any of the stocks mentioned. The Motley Fool recommends ROGERS COMMUNICATIONS INC. CL B NV and TELUS CORPORATION.