With the rollout of ultra-fast broadband still under way in New Zealand, and 4G mobile only available in recent years, it’s hard to think ahead to the next era of internet connectivity.

But 5G is about to rock our world.

The last jump, from 3G to 4G, didn’t feel that impressive, but it was the start of a huge industry surrounding the Internet of Things.

These smart technologies will mean our fridges can talk to us and order smart home products, and we can stream the next Rugby World Cup or F1 from our devices despite large audiences using data.

Consumers will soon realise the difference 5G will make. Download streaming speeds will leap, even at peak times, and it will boost the power of our phones.

An almighty battle for investment has started as Chinese and US telecommunications companies race to be the first to offer the network.

Now some governments, like Australia and the US, are actually blocking Chinese firms Huawei and ZTE from accessing their 5G networks, due to security concerns, or to reduce competition.

What is 5G?

5G is the next step of cellular networking after our current 4G network.

With 5G, network speeds are expected to be up to 100 times faster than our current wireless networks, and the next evolution will be even more impressive. You should be able to download a full-length movie in just a few seconds.

Consider the impact on television and virtual gaming, downloading sports streaming in the blink of an eye, and the resulting huge growth in mobile apps.

Already 5G networks are already being rolled out across a number of US states and are expected to launch across the world by 2020.

They’ll work alongside existing 3G and 4G technology to provide faster, better connections that stay online no matter where you are.

In New Zealand, Spark has already switched on its own test site, in partnership with Huawei for technical and equipment support. A trial is also taking place at Vodafone.

China’s mission to win the 5G race

The race is now on between China and the US over who’ll be the leader in next-generation wireless mobile technology.

China is the world’s largest mobile market, with more than 700 million internet users, likely to grow to one billion. It’s determined to take the lead, and is backing its plan up with billions of capital as a national priority.

It’s already invested in hundreds of thousands of cell sites, in competition with US telecommunications firms’ infrastructure development.

The US was expected to auction off the high-frequency spectrum for 5G services in November to the major players and US President Donald Trump has announced a special taskforce for its spectrum strategy.

Telecommunications firms are already investing there. Verizon has spent more than US$120 billion on its network since 2000, to provide 98 per cent 4G coverage, and AT&T has poured billions into its network, so that the first devices will be on new networks by 2019.

However, the Standard & Poor’s 500 Index ratings agency has warned that wireless firms planning 5G services could wait five to 10 years to recoup their investment.

Internet of Things

There are big investment opportunities in Internet of Things, or IoT, which covers everything that is and will be connected to the internet.

We can already see the effects in Google Home pods, driverless cars, Amazon Echo devices, and wireless security systems.

Firms that will benefit:

· Local listed telcos and firms that lay the cables and provide networks – like Spark and Chorus.

· Big US and Chinese telcos – Verizon, AT&T, Broadcom, T-Mobile and Huawei.

· Companies developing uses for the Internet of Things – Google, Amazon, Facebook, Alibaba, IBM, Microsoft, and Apple.

· Streaming services which will benefit from speed – Netflix, Amazon, e-sports platforms and gamers.

The outlook

Most people will welcome lightning-fast connection speeds for a better and buffer-free experience when you’re streaming sports or watching Netflix.

The bigger story will be the battle for dominance between countries, as 5G becomes a political football and countries block each other’s development of infrastructure and technology.

However, government satellite and monitoring systems will also benefit, making privacy and data security a challenge.

Definitions

4G: 4G is the fourth generation of broadband cellular network technology, succeeding 3G.

Internet of Things (IoT): How computing devices embedded in everyday objects connect to the internet, enabling them to send and receive data.

Standard & Poor’s 500 Index (S&P 500): A market capitalisation weighted index of the 500 largest US publicly traded companies, across all industries, by market value.

First published 26 November 2018

Story by Chris Smith

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