Several operators world over have announced intentions or plans to shut down their 2G networks. The timeframe indicated for this possible shutdown is around 2017-18 timeframe. As wireless carriers are likely to go ahead with their plans, there could be a number of implications for the industry. While we have about five years before the proposed shutdown takes place, it is important to take stock of the current role of 2G networks.
2G networks typically operating in the 850/900 MHz bands have been pivotal in providing close to 100% geographical coverage due to the better propagation characteristics they offer compared to the 2,100 MHz at which 3G operates. 2G is also cost effective in comparison to 3G as its propagation characteristics ensure equivalent coverage with fewer base stations. This is especially true in areas where the density of users is lower as the economics of providing ubiquitous coverage are much better in 2G. In addition, 2G networks still carry a bulk of the voice calls in many networks. This move will perhaps result in a substantial rebuild of existing 3G network and the migration of services to the 3G network.
Some regulators have initiated spectrum re-farming process and some have allowed 3G networks to be launched in the 900 MHz band. Device manufactures and equipment vendors have started down-banding and creating products to support some networks in Europe that have early movers to vacate the 900Mhz spectrum especially in HSPA. Operators are working to push Machine to Machine (M2M) communications and introduce services like “smart metering” and “home automation” which have been identified as thrust areas by services providers in their quest to bolster falling revenues. The move to switch off 2G networks would have a serious impact on the M2M services as a majority of the modems used in M2M applications are based on 2G connectivity standards.
This move to switch off 2G networks by operators is coming at time when they are aggressively building wireless broadband networks based on LTE and LTE+. Operators who have initiated this big switch off are likely to have more than their hands full especially as they continue to struggle to make financial sense of their bloating bills to fund the Capex needed for their 4G investments.
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