What to Shut Down First 2G or 3G?

Spectrum RefarmingTelenor Norway announced it will shut down 3G network in 2020; five years before 2G.

This is yet another example of how operators in Europe are diverging from North American operators by opting to shut down 3G ahead of 2G. 3G is much less efficient in carrying data traffic than LTE which is twice better.  2G/GPRS is the workhorse for M2M services by operators. Also, the relatively small networks and markets in Europe and the amount of roaming makes a case to keep 2G operating for longer.

The interesting part is how will operators handle the shutdown 2G while over 75% of M2M connectivity uses it. In North America, there would probably still be a few GSM channels operating to service these devices. LTE would be overkill technologically for many of these applications not to mention its cost (today some $50 vs. $10 for GPRS module). Europeans on the other hand would be hoping that LTE-M would be well mature and at the right cost points by 2025.

M2M Connection Share

M2M Connection Share [Source: Cisco VNI 2015]

I still believe there’s room for low-power wide-area networks to make an impact particularly serving private networks. This is one angle where disruption in IoT space will come from. Having a flexible technology, business and operational framework fits well with the concept of IoT which is a fragmented and siloed market, which may always be the case as applications diverge greatly in requirements. The question is what impact will narrowband technologies in licensed spectrum will have and how they will eventually fit within the spectrum strategy of the operators who may or may not be considering IoT framework as they go about refarming 2G and 3G spectrum for LTE.

 

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About Frank Rayal
Technology strategy, markets and M&As

3 Responses to What to Shut Down First 2G or 3G?

  1. Its simple 3G, its in-efficient compared to 4G, while 2G is still very efficient for M2M/ioT until 5G arrives.

  2. Bertus says:

    The fact that Telenor is planning to shut down its 3G network long before 2G is of particular interest to me. In African countries it seems that 3G is battling to get traction in the market…Most MNO’s are seeing themselves digging deep year after year to increase 2G capacity and coverage. It may be a combination of lack of real value to be delivered over cheap 3G handsets – in order to have a captive experience on 3G, a $20 feature phone still seems to be insufficient and the delta between a ultra low cost 2G and competent 3G smartphone is still too big. What is interesting is the volume of 2G/4G handsets at $50, from China, suddenly seen on the market. Will the African market also pan out as a very prolonged 2G downward slope while 4G starts picking up number originally destined for 3G???

    • Frank Rayal says:

      There seems to be an undercurrent to move to 4G in Africa that supports your point… In speaking with equipment vendors, some have expressed disinterest in 3G in favor of 4G for Africa…

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