June 2, 2015
In August 2012 AT&T announced that their 2G network would be shut down latest January 1 2017. This was somewhat surprising to me since roughly 90% of all M2M devices connected to mobile networks used 2G. (https://connectcompute.com/2012/08/08/what-will-be-the-impact-on-m2m-of-announcement-to-shut-down-2g/) Given that 3G is something of a compromise I would have believed that 2G and 4G would be a better bet – one with cheap modules, low bandwidth and great coverage and one focusing on data intensive terminals and applications.
Since two years, we have started to see mobile operators taking different roads for IoT. Good examples include Tele2 who only provide connectivity and great partnerships, Telenor Connexion who was the first to use both Jasper and EDCP (because they follow their customers) and KPN who returned back to Holland, building their business from there with excellent roaming.
And here we go again! Telenor Norway’s CTO, Magnus Zetterberg, said at an investor meeting in London that the company plans to completely shut down its 3G network in 2020, five years before it closes 2G in 2025. “It’s better to retain 2G than 3G because all the devices today are still embedded with 2G, so you will lose out without the network,” he said. “2G is still important for the M2M market.”
I believe this is a good approach since replacing all 2G M2M modules installed across the country to something else, even if only a SIM-card from someone else, is a disturbance and cost the customers neither expect nor like. The labour cost involved in changing are typically far bigger than the hardware. And Telenor is creating yet another criteria for customers to evaluate when picking mobile operator for their IoT applications. And with a 2G/4G approach an operator probably has a better answer to a customer who want to deploy a large IoT project today with an ROI calculation for 8-10 years.
September 17, 2012
The recent announcement from AT&T that they will shut down their 2G network latest year-end 2016 has been discussed a lot lately. It is safe to say that mobile operators in developed markets will continue transitioning their handset users and networks towards 3G and 3G LTE. But mobile operators in general have a growing number of M2M terminals in their networks and they know that over 90% of them are using 2G modules today. Many of them are recently deployed and expected to run without intervention for maybe another five to ten years. Going there, changing SIM, terminal or in worst case the entire device is a very costly thing to do. This is probably why mobile operators in general don’t talk about when they plan to terminate their 2G networks. And I don’t think we will see many announcements like the AT&T one for the next few years, especially not in Europe. Also, let us not forget that many operators in developing countries only have 2G so it will definitely be around for quite some time.
Over the air provisioning of SIM-cards will solve some of the 2G sunset problems but if you need another module in your terminal it will obviously not help. One or two operators in a market, or why not an MVNO, can gather all the 2G terminals and continue service them until the bitter end. The remaining operators would lose some clients but free themselves to go wild on 3 and 4G.
More and more new M2M solutions are using 3G and 3G LTE now. This is natural especially when applications are data rich and require low latency. At Qualcomm IQ last week in Berlin, Steve Mollenkopf, President & COO Qualcomm, stated that one million new 3G connections are added each day. Most of them are not M2M but it means that 3G network capacity and coverage is rapidly improved around the world. And modules and components are coming down in price as volumes grow. And even 3G LTE is spreading. According to Global mobile Suppliers Association (GSA) 96 operators have launched commercial LTE services in 46 countries so far. But the recent announcement of iPhone 5 reminds of the fragmented frequencies of 3G LTE which needs to be taken into account when looking at a specific M2M 3G LTE solution. 3G LTE uses frequencies between 698 MHz – 3800 MHz, divided in 25 bands for FDD (Frequency division duplex) and 11 bands for TDD (Time division duplex).
August 8, 2012
AT&T just announced that they will shut down their 2G network no later then January 1 2017. They want to free up spectrum for mobile Internet network capacity. “Well in advance of this change, we will reach out to our relatively small percentage of 2G customers and offer them options to meet their needs” says a spokesperson to Fierce MobileIT. According to Berg Insight AT&T had 13.1 million M2M subscribers by the end of 2011. It is often stated that the 2G share of the M2M subscriptions are bigger then 90%. I don’t know the AT&T mix but it is likely that at least half of their 13 million subscribers use 2G.
PricewaterhouseCoopers recently made a study and found that 60 percent of wireless operators plan on decommissioning their legacy networks over the next five years. Their study would suggest that more operators would like to make similar announcements as AT&T.
M2M terminals are often expected to be operational 5-10 years which makes the choice of network technology difficult. From a capacity point of view 2G is often enough and 2G modules are cheaper than modules supporting 3G and 4G/LTE. Coverage of the 3G networks are often not as good as the 2G networks. It is far too early for LTE networks to take over. Support for circuit switched connections which are required when moving terminals from the fixed phone networks (PSTN) to mobile networks is only available in 2G. It will be interesting to see what AT&T’s announcement will do to customers, regulators and other mobile operators. And what about countries were mobile networks are all 2G?
I believe this is a challenge for the development of the M2M market. As far as I understand it, AT&T will have to subsidize the remaining 2G M2M customers to replace terminals or loose the customers to other operators. This new situation for ongoing and planned M2M projects might delay or in worst case kill them if the up-front investment becomes substantially bigger. This news also explains why M2M customers need over-the-air provisioned SIMs.
January 31, 2012
“I would say that 2G is not going away anytime soon, but if you are concidering new M2M installations today I would definetly recommend going with 3G compatible devices and to use 2G/3G compatible SIM cards. There is no guarantee of a maintained functionality in 2G networks looking ten years down the road (a normal life span for many M2M installations), and 2G CAPEX and OPEX will decline with all operators. Even if you take a slightly higher investment initially using a 3G device you will avoid the risk of having to exchange both SIM card and modem during the life span of your installation. Besides, prices on 3G modules are dropping and are rapidly approaching similar price levels as 2G units. This is of course dependent on the life span of you M2M installation and the amount of data you need to transfer. From an operator point of view, I am curious of which industry will first make use of 4G networks and M2M to rapidly transfer streaming video for specific surveillance tasks or other data intensive applications.”
Martin Svensson, M2M Product Manager, Tele2
December 14, 2011
What networks are used for M2M applications today? We know a lot of applications use the fixed network (PSTN) but I lack data on that. I visited a friend with a quite small but modern grocery store the other day and beyond the main connection provided by headquarters for cash registers, computer systems, telephony etc, he has three separate PSTN lines to his shop: one for a video surveillance system, one for recycling machines and one for an alarm. When talking to a friend at a fixed line operator recently he mentioned that they have energy companies with water power plants with thousands of PSTN subscriptions for level gauges.
The 2G networks are by all means the most utilized mobile networks for M2M today. Beecham Research claims over 95% of M2M applications use 2G today. Good coverage, reasonable prices, limited capacity required, affordable modules and history explains this situation. And despite push for 3G from vendors and operators, not a lot is happening except for some specific applications. Vendors obviously want to sell new products and some operators want to re-use 2G spectrum or move users for other reasons. For people developing or operating an M2M solution a key question must be to understand when the time is right to change from 2G to 3G (if ever) and how to implement the change. A clear detailed roadmap could be a competitive edge for an operator. Interestingly enough some, primarily vendors and operators, already claim 4G is the way to go for M2M.
Most of Ericsson’s modules business ended up in ST-Ericsson some years ago and they re-entered in 2007 to provide cost effective broadband modules to be built into PCs. Quite silently they announced the end of their broadband modules business in December 1, 2011. The reason provided for the exit was: “our position on the market does not provide the scale we need to achieve the desired profitability”. I believe the actual size of the market for 3G modules also is part of the explanation. ABI claimed last summer: “USB configurations are outselling embedded modems by a ratio of more than three to one” and expected USB configurations to stay bigger until at least 2017.
3G has been around for some ten years now and in dense populated areas it is heavily utilized and 4G is starting to be deployed. But in rural areas most people relay on 2G (some even don’t have 2G) and in some developing countries they haven’t even started to deploy 3G yet. In the end of the day it is market requirements that decide when and to what extent networks will be built, upgraded and utilized, not operator or vendor desire. Still today most M2M applications don’t need much more than decent connectivity (I don’t include Pads, tablets and Smartphones in M2M), and for these to go 3G we need competitive coverage, prices and module prices compared to 2G.