While a six-month delay in the 3,500MHz spectrum auction critical for 5G deployment isn’t going to affect Canada, analysts say the country should not delay deploying its full 5G network by more than a year otherwise it will start to fall behind other developed countries.
Duncan Stewart, director of technology, media and telecommunications research for Deloitte Canada, said in an interview that Canada will use the U.S. as a benchmark in deploying 5G and that there is no “hard and fast rule” on when the right time to deploy the network will be.
“The rule of thumb is that for most countries the relevant question is ‘am I keeping up with my neighbours?’ 5G isn’t a sprint, it’s a marathon. So the first year, the second year, the third year, this is not something that matters enormously,” he said. “A six-month slippage is not really a material thing.”
Innovation, Science, and Industry Minister Navdeep Bains announced last week that his department is postponing the spectrum auction due to COVID-19.
In general, 5G operates over traditional and new cell radio frequency bands that include the low- (sub-1GHz such as 700MHz), mid- (1.6GHz, around 3.5-3.8GHz), and millimetre-wave (mmWave, such as 28GHz) ranges.
The 3,500MHz band is critical specifically in cities where thousands of small cells will be deployed to be used for self-driving cars and many consumer applications.
The Canadian Wireless Telecommunications Association indicated in a December 2019 report that 5G will generate $40 billion of annual GDP by 2026 and will create 250,000 new jobs.
Stewart doesn’t think that a short delay will affect that projection.
“If I want to make a pie for dinner tonight and I’ve got flour, sugar, lard, and apples, whether I make the pie at 9 am, noon, or 5 pm, it’s still the same size pie at the end of the day,” he said, referring to the rollout of 5G.
Despite the U.S. being ahead in its 5G rollout, the coverage is still spotty and not great, said Gregory Taylor, a spectrum expert and assistant professor at the University of Calgary.
“A year or two behind might actually work to our advantage as there will be bugs that need to be worked out of the new system,” Taylor said in an interview. “The ‘[5G] race’ is overhyped but we can’t ignore it either.”
Taylor added that we still don’t know the real benefits of what the next generation of wireless networks can provide.
“There can be some first-to-market advantage, but in the end, it’s about doing it properly and I don’t think there’s a lot of advantage for us to being the first to roll this out, there are still enormous question marks about 5G,” he said.
4G technology brought big impacts, Taylor said, including services like Uber.
“But it turned out that was one of the side benefits of [4G]. A lot of this you have to build it and then you’ll see the [benefits],” he said.
Like Stewart and Taylor, Edward Jones’ analyst Dave Heger also added that the six-month delay won’t have a financial impact on Canada.
Heger said in an interview that the only drawback will be for carriers that may want to charge more for 5G services versus 4G.
“Maybe the missed opportunity in the near term is for Canadian carriers wanting to shift customers over to unlimited plans, and this may push back that opportunity,” he said. “We’re still not at the point where [we’re] ready to proliferate on a wide basis.”
In January, Rogers announced it is rolling out its initial 5G wireless networks in various downtown markets across Canada. On June 11, Bell also announced it will launch its initial 5G network in Montréal, the Greater Toronto Area, Calgary, Edmonton, and Vancouver.
When Rogers announced its plan to initially launch its 5G network, Heger said right now there are more customers on limited data plans and aren’t using as much data, but once 5G rolls out customers will want to latch onto an unlimited plan even if they end up having to pay a little bit more.
Canada is still working on 5G applications, so not having it widely available yet is not a big concern, Heger said.