Printer icon Print Page
Hot Topics in Economics

5G Networks—The Future is Here!

Aug 14, 2017
Kristelle Audet Kristelle Audet
Senior Economist
Canadian Industrial Outlook

Momentum is clearly building around the future deployment of 5G networks in North America. 5G will be essential in order for Internet of Things (IoT) applications and self-driving cars to become mainstream. It may also unlock significant growth potential for the Canadian telecommunications industry, which has barely grown in recent years as measured by its gross domestic product.

Last May, the World Wireless Research Forum, an organization that brings together the global wireless community, hosted its fourth annual 5G Huddle Conference in Ottawa. The conference, supported by Innovation, Science, and Economic Development Canada (ISED), brought together industry researchers, technologists, and executives working in governments, corporations, and academia from all over the world, reinforcing Canada’s role in the global race toward 5G. Shortly thereafter, ISED launched a public consultation on the future release of millimeter-wave (mmWave) spectrum1—the category of spectrum that will most likely be used to develop and deploy 5G.

While the discussion about opening mmWave spectrum in Canada is just starting, the United States is already several steps ahead. In 2016, it became the first country in the world to open high-frequency spectrum above 24 gigahertz (GHz) to wireless services, with the Federal Communications Commission making 3.85 GHz of licensed spectrum available in the 27.5 to 40 GHz bands and creating a new unlicensed band at 64 to 71 GHz.2

It is therefore no surprise that the top three U.S. wireless providers recently announced their plans for 5G trials and deployment. Both Verizon and AT&T have already begun trials of 5G fixed wireless access in selected locations across the country, and T-Mobile announced its intent to start rolling out a nationwide 5G wireless network in 2019, with full national coverage by 2020.

No similar announcements have yet been made by Canadian telecom carriers. However, both Telus and Bell have been actively working with global telecommunications equipment firms to test available 5G technologies. Last year, Bell reported that in successful testing with Nokia, they were able to achieve speeds more than six times faster than today’s available speed. And through its partnership with Huawei at the Vancouver Living Lab, Telus reported achieving groundbreaking speeds of 30 gigabits per second—200 times faster than the maximum 150 megabits per second that today’s LTE networks can theoretically achieve.

2018 will be a big year in the development of 5G. The Third-Generation Partnership Project (3GPP), a consortium of seven telecommunications-standard development organizations from around the world, will release the standards that will define 5G. The announcement of these specifications will kick-start the rollout of 5G networks as early as 2019, with expected speeds at least 10 times faster than today’s 4G networks can achieve.

The deployment of 5G in coming years will unleash the potential of a wide range of technologies, such as IoT or machine-to-machine (M2M) applications, self-driving cars, and virtual or augmented reality. 5G will enable the billions of connections necessary for IoT/M2M applications to fully take off in sectors such as transportation and logistics, manufacturing, and agriculture, and will also be instrumental in allowing self-driving cars to make critical decisions in a split second.

However, before the full benefits of these technologies are realized, a classic chicken-and-egg situation needs to be resolved. Developing and deploying 5G networks will require telecom carriers to make massive investments, and it is not clear whether new business models will arise to provide a return on those investments.

In Canada, it is unlikely that this technological advancement will lead to significant increases in household spending on telecom services, unless it results in completely new ways to communicate with one another. The more likely near-term outcome is that new business models will emerge in the corporate sector, especially as IoT applications and their associated data take off. Large firms will be keen to leverage 5G networks to tap into these invaluable data pools, which may help them uncover trends from all spheres of life, improve efficiency, and gain a competitive advantage.

All in all, 5G will likely speed up the innovation cycle and may mark the next phase of robust growth for the Canadian telecom industry.

1    Innovation, Science, and Economic Development Canada, Consultation on Releasing Millimetre Wave Spectrum to Support 5G (Ottawa: ISED, 2017) (accessed July 6, 2017).

2    Federal Communications Commission (FCC), FCC Takes Steps to Facilitate Mobile Broadband and Next Generation Wireless Technologies in Spectrum Above 24 GHz, news release, July 14, 2016 (accessed July 4, 2017).