You probably won’t have been aware of the emergence of 1G, the analogue first-generation of wireless cellular technology, in the late 1970s and early 1980s. Do you remember when all your mobile phone was for was making phone calls? Probably not. But most will remember when, in the 1990s, 2G came along and opened up a brave new digital world of text and picture messages. “Wow! The future is here!” we all exclaimed—probably via SMS. But it wasn’t. As is always the case, the future was yet to come.

In the early 2000s, 3G brought us mobile broadband, and a decade later 4G arrived, providing real speed and the smartphone experience we enjoy today. If you are fortunate enough to be on the younger end of the millennial-age spectrum, you might only know the wonderful world of 4G. And now, even youngsters can prepare to be wowed —5G is here (almost).

In February, the Smart Internet Lab at the University of Bristol, the 5G Innovation Centre at the University of Surrey and the Centre for Telecommunications Research at King’s College London showcased the world’s first end-to-end 5G mobile network at the Mobile World Congress in Barcelona. “The UK is now in a unique position to showcase what 5G can achieve thanks to recent government investment,” said Professor Dimitra Simeonidou, Director of the Smart Internet Lab. “Our pioneering joint research programme will pave the way for applications that could transform our lives, ranging across transport, health, education, entertainment. We know that 5G will deliver the ultra-reliable and ultra-fast networks of the future—our job is now to demonstrate benefits, develop skills and support a rapidly developing 5G commercial ecosystem in the UK.”[1]

"O2, Vodafone, EE and Three—splashed out £1.35 billion at an auction organised by telecoms regulator Ofcom."

In March, the UK government announced the latest stage of its 5G Testbed and Trials Programme, the Urban Connected Communities Project, “a large-scale, citywide testbed for wireless 5G infrastructure”—a 5G city[2].

In April, the UK’s four biggest mobile telecommunications providers—O2, Vodafone, EE and Three—splashed out £1.35 billion at an auction organised by telecoms regulator Ofcom for a share of the radio spectrum in the 3.4GHz range required for 5G.

Minister of State for the Department for Digital, Culture, Media and Sport, MP Margot James, said she hoped the spectrum would help the UK lead the 5G revolution and build a Britain fit for the future. “We hope that it can now be deployed as soon as possible for the benefit of consumers right across the UK,” she added[3].

The roll out of 5G isn’t going to happen immediately. Wired reporter Matt Reynolds expects 5G-ready smartphones to hit the market 2019, but believes we will probably have to wait a little longer before the infrastructure is in place to utilise their full capabilities. “It’s likely that we’ll have 5G-ready devices a while before network providers are ready to actually roll out widespread coverage, so it may be some time before you actually connect to a 5G network in the real world,” he writes[4]. In a recent episode of BBC Radio 4’s The Bottom Line, titled Will 5G revolutionise our lives?, presenter Evan Davis estimated 5G would be rolled out in 2020, “possibly even earlier”[5]. It’s all a bit up in the air, but it is likely the 5G revolution will take place within the next few years.

"Maximum download speeds for 4G are around 50 megabits per second; 5G could be more than 100 times faster."

What is certain is that 5G is going to change things, perhaps even more than the introduction of 4G did a decade ago. Maximum download speeds for 4G are around 50 megabits per second; 5G could be more than 100 times faster[6]. You will be able to download a movie to your smartphone in less than 10 seconds. Networks will also be more reliable—i.e. there will be no loss of connectivity.

Ofcom believes 5G will “enable more effective wireless delivery of newer services such as virtual and augmented reality”[7]. For Forbes contributor Daniel Newman, 5G is critical to the future of VR and AR. “It is a widely understood fact that we cannot welcome AR and VR without 5G,”[8] he writes.

But the biggest benefit of 5G will be low latency, or to put it simply, instant response. Instant response will be particularly important when it comes to new technologies such as driverless cars. Driverless vehicles will have to be able to register and react to hazards, traffic signals, etc. in real time in order to operate safely. Forbes contributor Bijan Khosravi goes so far as to argue that, “Autonomous cars will become a reality, but it won’t happen until 5G data networks are ubiquitous”[9]. For the same reason, instant response will also be vital to unlocking the full capabilities of drones, remote surgery and smart manufacturing.

Nicholas Shields, a Research Associate for Business Insider Intelligence, believes the introduction of 5G and the resulting increase in the speed of data transmission could revolutionise the Internet of Things (IoT). Business Insider Intelligence estimates that 22.5 billion IoT devices will be installed globally in 2021, with companies spending almost US$5 trillion on the IoT in the next five years[10].

Our smartphones have become an integral part of how we live our lives, and that is unlikely to change. But soon we will look back on the capabilities enabled by 4G and chuckle to ourselves, in the same way we do when recalling the halcyon days of SMS.

This story is designed to throw an everyday lens on some of the issues being discussed and debated by investors across the world; it is not research, so please do not interpret it as a recommendation for your personal investments. However, if something has piqued your interest and you would like to find out more, please contact one of our Investment Managers on 020 7337 0777.