Скачать или смотреть Real assets: telecom infrastructure & 5G

Terry Dimock





Welcome to NBI Quick Takes. My name is Terry Dimock, Head Portfolio Manager for National Bank Investments. I’ll be your host for a three-part series focused on real assets.



First of all, a disclaimer. BNY Mellon Asset Management Canada Ltd. is the portfolio manager of the NBI Global Real Assets Income Strategy and its affiliate, Mellon Investment Corporation, is the subadvisor. Today, we are joined by Mellon portfolio managers, Jim Lydotes, and Brock Campbell, to chat about real assets. This discussion is for general information only and should not be taken as advice or a recommendation to purchase individual securities.



My guest for this second episode of three is Jim Lydotes, lead manager of the National Bank Global Real Assets Income Fund. In this episode, we’re going to spend time on telecom infrastructure, which is so important for our personal lives and also our business lives.



Welcome, Jim!



Jim Lydotes



Thanks Terry. Thanks for having me on.



Terry Dimock



We’re happy to have you with us.





Let’s talk about telecom infrastructure. What is telecom infrastructure and why are they good investments?



Jim Lydotes



There are three parts to telecom infrastructure. There are towers, cable and fibre. Historically, when people think about telecom infrastructure, mainly their minds go to towers. Towers are big, they’re ugly, most people don’t generally want a tower in their backyard. I know I certainly don’t want a tower in my backyard. It’s very difficult to get permits to build towers for just that reason. This has historically set them up effectively as natural monopolies. If you think about the business of a tower, there’s very little ongoing CapEx required once a tower has already been built. When a tenant wants to add equipment to a tower, generally they have to pay for that.





So the revenue of the tower grows with data usage, and when you put that all together, you have an asset in place that costs close to nothing to operate on an ongoing basis, has pretty much a monopolistic position where it’s located, and with steady and consistent revenue growth, there are really few assets in the infrastructure space so well positioned to grow, especially when you consider the outlook for continued growth of data usage.



Terry Dimock



And as you just said, we’re just using more and more data every single day. Maybe you can talk about how data actually travels from point A to point B, and how do towers, fibre, data centres, how all of that functions together.





Jim Lydotes



When you speak into your cellphone, there’s a little chip in your phone that converts what you say into a series of numbers. Those numbers are then translated in a radio wave to the closest cell phone tower. So if you’re calling another person on the same network and in the same area, like one of your neighbours, that signal is going to go from your phone to the tower and then bounce right over to their phone and really that completes the connection.





But if that call needs to go to another person on another network or further away, then fibre will bring what’s called backhauled data to another location in the network where it will then be routed to the nearest cell phone tower to that recipient.



If you think about data centres, generally data centres are not involved in the daily transmission of phone calls but are often the end location of data traveling out of your phone and stored in the cloud. If you’re an iPhone user, and you’re storing pictures in the cloud, once you take that picture it’ll travel through that network and end up in a data centre where it’s stored in the cloud.



Terry Dimock



We’re starting to see a lot of advertising on 5G. Every provider seems to have their flavour they’re talking about rolling out. What really is 5G and why does it matter?





Jim Lydotes



First of all, why it’s called 5G: 5G is the fifth-generation network, effectively the latest wireless standard. It’s expected to be up to one hundred times faster than what we’re on right now, 4G. So if you think about what that actually means, that’s going to allow you to download a two-hour movie on your phone in less ten seconds. Right now, that would take roughly seven full minutes on a 4G network, so tremendously faster than what we have right now.





This is an entirely new technology and it’s built on something called a high-band spectrum. A high-band spectrum is great for latency or lag, which is effectively the time it takes between me sending you a text and that text message popping up on your phone. And this is an issue that’s critical when you contemplate high-speed robots moving around a factory floor around people, or imagine how critical latency is with self-driving cars speeding down the highway at 100 km/h.



The one problem 5G is that these signals, while they’re moving very fast, they can’t go very far. They have a tough time going through walls, through windows, hard surface...