By the end of next year, Telstra will have shut down its 2G/GSM network, and AT&T in the US will not be far behind. Operators worldwide are now in transition to termination, and the demand for 3G and 4G LTE Machine-to-Machine (M2M) devices is expected to grow as a result.

Operators in transition will need to sustain legacy M2M revenues, and companies with 2G M2M devices in the field will be required to migrate to 3G and 4G LTE to avoid disruption when network closures occur.

According to an Ovum released last month, “The mobile industry is at a turning point, with operators in markets with high LTE penetration and limited LTE spectrum, including Korea, Australia, and the US, announcing GSM or CDMA network closures to free up spectrum for HSPA+ and/or 4G. In other markets, such as Japan, Singapore and Macao, licensing and regulatory decisions have affected network closures. We expect more operators to announce switch-off dates for their GSM or CDMA networks due to commercial reasons over the next three to four years.”[1]

In Singapore, 2G license expiration is forcing network termination and NetComm Wireless’ partner, SingTel is expected to turn off its 2G network in 2017, having received government approval for the implementation of 3G services.

Operators achieve greater efficiencies from switching off 2G networks and refarming the spectrum for 4G, and the number of commercially launched 4G LTE networks has hit 360 in 124 countries as a result.[2] Japan and South Korea have already migrated to higher-speed technologies that are less expensive to operate over time, and the rest of the world is set to follow.

Operators that are turning off their 2G GSM/CDMA networks and migrating M2M customers to 3G and LTE are at the forefront of change, according to Ovum. Whether the shutdown strategy is short or long-term, legacy M2M customers will be required to upgrade.

The sunset of 2G networks will have the biggest impact on early M2M adopters. Companies that entered the wireless M2M market some years ago will soon bear the unavoidable cost of replacing their 2G devices, and this presents significant opportunities for NetComm Wireless.

With operators fast investing in improved network coverage and capacity, demand for 4G M2M devices is expected to accelerate over the coming years. As well as keeping M2M applications connected over the long term, 4G LTE delivers the speed, power and performance needed to manage large amounts of data from digital displays, smart buildings, remote healthcare, emergency response, business back-up and other bandwidth-intensive M2M applications.

Size of the opportunity

Ovum estimates there were 4.2 billion GSM-only subscriptions globally (58.5% of total subscriptions) at the end of 2014. According to Ericsson, 80% of M2M devices are GSM only. The low GSM data rate supports the argument for freeing this spectrum to support more data, and operators worldwide are making moves to repurpose GSM spectrum for LTE as a result. [3]

2G has served us well. It was the second generation of mobile technology after Analog, and while it remains the dominant technology in terms of total connections – 2G is making way for the added speed and capacity of 3G and 4G and NetComm Wireless has the technology in place to facilitate mass migration.

Faster Future Graph

[1] Ovum.2G/3G Migration Strategies. Nicole McCormik. 16 April, 2015.

[2] GSA, 2015.

[3] Ovum.2G/3G Migration Strategies. Nicole McCormik. 16 April, 2015.