Canada’s deployment of 5G technology could be delayed because of waning consumer demand, smaller telecom budgets and the growing popularity of conspiracy theories linking the wireless networks to the COVID-19 pandemic.
The global health crisis has prompted a number of governments around the world, including those of Spain, Portugal, France, Austria and Denmark, to postpone coming auctions of spectrum. Corporations have been unable to bid on these sales for the rights to radio waves used to send wireless signals because they have not been able to hunker down in their war rooms for the bidding process.
Although Canada’s auction for 3,500 MHz spectrum, a key band for the deployment of fifth-generation wireless technology, is not slated until December, Desjardins analyst Maher Yaghi says telecom companies are likely pushing for a delay.
A wave of business closings and bankruptcies are expected to eat into the revenues of Canada’s telecom companies, leaving them with less cash to bid on spectrum or make massive infrastructure investments in next-generation networks.
“We could see a delay in the spectrum auction to allow these companies to recuperate some of these losses that they’re currently facing,” Mr. Yaghi said.
And it could be in the federal government’s best interest to postpone the sale. Running an auction process at a time when bidders don’t have an appetite to shell out means Ottawa “might not get the full value of the spectrum,” he said.
Innovation, Science and Economic Development Canada has not announced any delays to its coming auction, although it has extended the deadline for companies to pay their annual spectrum licence fees by several months.
Another consideration is that companies who purchase spectrum are required to deploy it within a certain time frame, said Georg Serentschy, a former industry regulator in Europe and consultant who advises Telus Corp.
“They have to build,” said Mr. Serentschy, who is based in Vienna, but currently, many longer-term projects are on hold given the focus on keeping networks running amid a surge in usage, Mr. Serentschy said. “Network expansion is on the back burner."
With consumers feeling stretched because of the economic fallout of the pandemic, demand for 5G-capable phones is expected to wane, making it harder for telecom service providers to justify the sizable investments needed to build out the new networks, Mr. Yaghi said.
“When you make these large investments, you need the demand to be there to right away; [you need to] see adoption of the technology,” Mr. Yaghi said.
In order for consumers to adopt the technology, they will need to purchase expensive new handsets – something that many won’t be in the position to do for some time. That could prompt manufacturers such as Apple to delay the launch of 5G-capable phones, says Sascha Segan, lead mobile analyst for technology publication PCMag.
“With millions upon millions of North Americans losing their jobs, thousand-dollar phones don’t look so hot right now," Mr. Segan said.
Meanwhile, a surge in baseless conspiracy theories linking 5G wireless technology to the spread of the coronavirus has led to a flurry of arson and vandalism targeting cell towers across the United Kingdom.
The theories, fuelled by celebrities such as actor Woody Harrelson and singer M.I.A, have the potential to create permitting hiccups, Mr. Segan said.
“If the conspiracy theorists are too influential in various cities and towns across North America, they will be able to block wireless carriers from installing new equipment and that will really slow down the rollout," Mr. Segan said.
“All you need is a small town … where the town manager gets entranced by something on Facebook to then refuse to give permission for the carriers to set up equipment on town facilities.”
Ultimately, in spite of all the pandemic-related challenges, 5G is still coming, said Mr. Segan, "but it slows down the rollout process by potentially a number of months.”
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