Operators Face Question of Halting Second-Generation Networks
About 25 years ago in Finland, the world’s first 2G wireless network went live. It was a big jump from the assorted first generation of analogue mobile networks. Second-generation services pulled the world into the digital era, a development for which there should be unending credit.
But now, a quarter of a century later, some operators are evaluating the potential shutdown of 2G services and preparing their networks and subscribers as they plan to repurpose the spectrum for more-advanced wireless technologies. The move creates major implications for handset makers, infrastructure suppliers, roaming partnerships, consumers and enterprises, which include many machine-to-machine implementations of 2G networks.
There are some markets where a near-term 2G sunset would be impossible. In India, for example, about 80 percent of mobile subscribers are 2G users, relying on GSM handsets and networks for all basic communications. With more than 800 million 2G subscriptions, GSM isn’t going anywhere soon on the Indian subcontinent. Furthermore, some operators are considering the possibility of halting 3G networks in advance of 2G. In Norway, Telenor is anticipating a 3G shutdown in about 2020, a full five years before closing its 2G service, largely owing to the importance of the machine-to-machine market. Orange and Telefonica have also hinted at switching off 3G networks before 2G in certain markets.
But in the most mature mobile markets, 2G services have become less relevant to the vast majority of mobile users that now own a smartphone. As operators contemplate the technologies and uses for 5G, it’s difficult for them to justify hanging on to legacy GSM networks to cater to a diminishing subscriber group.
In Singapore, the nation’s three major wireless operators will begin a complete 2G shutdown in early 2017, aiming to repurpose mobile spectrum as the majority of mobile phone sales are now 4G. Singtel, M1, and StarHub will switch off their GSM, GPRS and EDGE services beginning 1 April. This won’t be a major shock to the system: only about 1 percent of mobile users in Singapore are 2G-only subscribers. Operators in the country are prepping their remaining 50,000 2G customers to upgrade to 4G handsets. Singtel, for example, is offering free phones and educating its users about the changes.
In other countries including Australia, Canada and the US, certain wireless carriers have begun the process of moving on from 2G. Singapore’s concentrated geography and tech-savvy population has enabled it to be early but other markets are working toward the same objective. Indeed, leading Australian operator Telstra closed its 2G network at the start of December 2016 after more than 23 years. It claimed to be the first GSM service outside Europe.
This could be an abrasive, multi-year approach in many countries and mobile operators will need to soften the process for cellular subscribers and machine-to-machine uses. Given the plethora of LTE bands used worldwide, GSM networks have been a global common denominator allowing handsets from most countries to get service in others. Roaming agreements between operators will need to be re-evaluated.
In addition, smartphone makers and their component suppliers will need to assess compatibility needs for end users, potentially eliminating 2G support, saving space in devices and reducing royalty costs.
There’s certainly some nostalgia here given that 2G is how this industry started in earnest. But operators across the globe are preparing to move on. We expect that during 2017 wireless operators and regulators in several advanced markets will announce 2G shutdown plans, often in coordination with 5G ramp-up efforts. It will take cross-industry planning to get through the coming generation gap but we expect this trend to accelerate quickly.
Subscribe to our blog
Make sure you don't miss out on our fresh insights on topical news in the connected world
"*" indicates required fields