Telus plans to spend $1 billion on a massive fibre-optic network upgrade that will increase the speed of its Vancouver services to 150 megabits per second for residential and business users, the company announced on Friday.

The $1 billion investment will be over five years with the first Vancouver neighbourhoods getting connected early next year.

"It's all about capacity ... The appetite for data is growing," said Telus spokesperson Luiza Staniec, who compared the upgrade to expanding a three-lane highway to five lanes.

About 10 per cent of cities in North America have a similar Internet capacity, Staniec noted. Earlier this year, Telus announced a similar fibre-optic upgrade in Edmonton.

The upgrade to Telus's Vancouver network is "the most significant contribution our organization can make to propel Canada's communications infrastructure and ensure its global competitiveness for decades to come," president Darren Entwistle said at a news conference in Vancouver Friday.

The upgrade is a boon to Vancouver's technology sector, said Mayor Gregor Robertson, noting it will "transform communications ... and significantly expand our success as one of the best connected and most competitive cities in the world.

The improved network will benefit health care, education and technology sectors, allowing them to send large files at high speed.

"This investment will spur continued growth in our thriving technology sector by providing the exceptional connectivity, speed, and capacity that are needed to power our innovation economy."