The Emerging Role of Connectivity

Connectivity already played a big role in our societies, yet due to the COVID pandemic this development has accelerated, with connectivity now an essential component of our daily lives. This has driven the rapid growth in network investment over the past couple of years, with the adoption of 5G also picking up much faster than that of previous-generation networks.

By  Ellen Grieg Andersen, Portfolio manager

The COVID pandemic shined the spotlight on the value of being digitally connected. Societies worldwide shifted massively towards relying almost solely on digital communication links to carry out everyday life, from working to shopping and conducting formal transactions, as well as getting access to key services, such as healthcare.

Thankfully, the world is currently emerging from the pandemic, with social and economic activity beginning to regenerate in many areas. Yet connectivity seems set to continue playing a central role in how people and businesses operate. Digital services will most likely play an even bigger role across all societies [1].

Huge gap worldwide

The rise in digital services comes amidst a severe backdrop in global development. Due to the pandemic, the progress of the UN Sustainable Development Goals (SDGs) has slowed down. And with only eight years left to reach the SDGs, stakeholders are renewing their efforts. Mobile technology has the potential to play a key part in the effort of reaching the SDGs, as it can improve access to education and healthcare while addressing problems such as poverty and inequality [2].

However, the rise in importance of connectivity also underlines a huge digital gap. According to the GSMA mobile communications industry association, there are still billions of people around the world who are not digitally connected. As of 2021, this amounted to 3.2 billion people – a fourth of the global population - who will now be at greater risk of becoming excluded from many life-enhancing services online [3].

Promisingly, network coverage is much less of a challenge than the gap in connected subscribers. With the expansion of network infrastructure and operators' investment in network infrastructure over the last decade, the coverage gap for mobile broadband networks has shrunk from a third of the world's population to only 6% [4].

The race to increase connectivity

The rise of 5G could contribute to closing the gap. The adoption of 5G has grown rapidly in pioneer markets, due to the recovery from the pandemic, and the expansion of network coverage, among other factors. Ahead, a new wave of 5G rollout in populous countries like Brazil, Indonesia, and India, could further incentivize the mass production of more affordable 5G devices. Estimates show that 5G will account for around a quarter of total mobile connections by 2025 [5].

Many countries are preparing to build more digital and connected societies. For example, India has previously launched a Rs 100 trillion plan for multi-modal connectivity, aimed at boosting its economy and reducing logistics costs, to ease 5G rollout in the country [6].

American Tower, one of our portfolio companies, which owns, operates, and develops wireless communications and broadcast towers in US, Canada, Latin America, Asia-Pacific, Africa, and the EU, plans to scale up their operations in India. Aiming to harness the potential of 5G in India, American Tower will invest $263.2 million in the country by 2023 and add 3500 tower sites nationwide [7].




[1, 2, 3, 4, 5] GSMA, "The Mobile Economy 2022"

[6] Tanay Singh Thankur, India Getting 5G Ready with PM Gati Shakti for Boosting Telecom Infrastructure

[7] Disruptive Asia, ATC to invest $263m in India to make its tower portfolio 5G-ready


Historical returns are no guarantee of future returns. Future returns will depend, among other things, on market developments, the manager's skills, the fund's risk profile and management fees. The returns can be negative as a result of price losses. There is risk associated with investments in the fund due to market movements, developments in currency, interest rates, economic conditions, industry- and company-specific conditions. Before investing, customers are advised to familiarize themselves with the fund's key information and prospectus, which contains further information about the fund's characteristics and costs.