In recent years, network operators have faced an impressive rise in smartphone numbers, which, in turn, lead to a higher demand of packet-data. A 2015 Cisco report indicated that in 2014 alone mobile data traffic increased with 69% from the previous year. Many mobile carriers have already devised what they call ‘sunset plans’. While things might be a bit easier for subscribers, the situation is more urgent and concerning for M2M and IoT devices. The same Cisco report showed that in 2014 62% of all these intelligent devices were connected to 2G networks.
This is precisely the circumstance in which, in 2012, AT&T announced its decision to discontinue its 2G network to reuse the 850 MHz and 1900MHz spectrum for its 3G and 4G deployments.
However, AT&T is not the only operator in this situation. In Singapore, for example, all the nation’s operators (M1, SingTel and StarHub) will no longer provide 2G services by the end of 2016. From the 15 of September 2015 mobile dealers will stop registering 2G-only mobile devices. Similarly, the 2G spectrum will be reused for 3G and 4G services.
Telstra, the Australian carrier, has the same 2G decommissioning deadline as the operators mentioned above, since sales on 2G devices have dropped dramatically and 2G data traffic represents less than 1% of the network’s whole traffic.
It’s easy to see why some operators chose to discontinue their 2G deployments, yet these are still the best networks to provide for low-power IoT devices. To them it is old, very few subscribers are based solely in these networks and current data traffic rates demand for spectrum reuse. However, 2G is far from being obsolete. Telematics applications, smart meters, sensors, credit card transaction processors and the IoT lot demand low-bandwidth connectivity. IoT needs an inexpensive, ubiquitous and consistent network and 2G is still the most suited technology for it.
Therefore, the accelerated growth of intelligent connected devices will bring all the more revenues to mobile operators in the future. Early adopters of M2M and IoT technologies represent the group who will be affect the most by a potential sunset of 2G networks. Migrating their devices to 3G or 4G will be costly and time consuming. What’s more, the IoT business operating in rural areas will scramble to find viable connectivity solutions because 2G is still the most reliable technology in isolated and remote areas.
Furthermore, there are still mobile operators in the Western countries who can’t seem to get enough of their 2G networks. Take operators like EE, Vodafone, O2 and 3 in the UK; these carries are set to keep their 2G deployments up and running as long as there are still plenty of isolated areas which are solely covered by the reliable second generation technology. Ensuring an almost total coverage in the British Isles is only possible with 2G networks. Not to mention the cases in urban areas in which subscribers performing voice calls are moved to 2G when 3G data traffic is more demanding.
An Ovum 2015 report states that in some markets 3G networks are in fact more likely to shut down before 2G ones. Nicole McCormick, a senior analyst at Ovum concluded that: “2G is still an important source of revenue. LTE provides a better mobile broadband experience than 3G, and with VoLTE, LTE can handle the voice responsibilities of 3G. This points to the possibility that operators opt to close their 3G networks before they close 2G.” A relevant example pointing to this line of reasoning is Telenor Norway who decided to safeguard its 2G network for their M2M market and who will discontinue its 3G network by 2020.
It’s safe to assume 2G is here to stay because the world still needs it. From communities in developing countries to the whole IoT and M2M market, there isn’t quite any other communications technology like it.