North America Should Lead World on 5G, Not Without Risks, S&P Says

North America leads the world on the adoption of 4G wireless and likely will lead on 5G, not without risks, S&P Global said Wednesday. “Aggressive 5G deployment strategy increases credit risk for the U.S. telecoms at a time when M&A, mature industry conditions, and competitive pressures are already straining their balance sheets although tax reform might provide near-term relief,” the report said. “Upfront costs are likely to be considerable and the potential financial benefits are largely unproven and could take years to come to fruition.” S&P warned revenue gains from the expanding IoT, autonomous vehicles and other new applications “will take time to develop, while capital outlays in the form of spectrum license acquisitions and fiber network deployments are likely to be substantial.” S&P said most new revenue sources will take five-to-10 years to materialize. The race to 5G likely won’t have negative implications for the credit ratings of the carriers, the report said: Capital expenditures and spectrum purchases “are manageable.”