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April 28, 2015

Why 2G will survive until 2020 – and may even outlast 3G

Telecoms firms must balance innovation and legacy income.

By Jimmy Nicholls

2G and 3G cellular networks are set to last until 2020 despite shrinking costs in 4G LTE wireless communication, according to analysis from the research firm Ovum.

Telecoms firms are being forced to balance a need to reallocate spectrum space to accommodate demands of better technologies with a desire to maintain existing sources of income.

Nicole McCormick, principal analyst at Ovum, said: "The majority of operators are not in a position today to close their legacy networks, nor will they be in the next one to two years.

"Rather, operators are deciding how to best manage a transition towards full network closure, given that M2M [machine to machine], voice, and roaming revenue cannibalisation remains a pertinent issue. We don’t expect networks to be retired en masse until closer to 2020."

Though some companies in US and Asia-Pacific have begun to close down legacy networks Ovum found that these were the exception rather than the rule.

There is also reason to believe that 2G networks may outlast their 3G equivalents, with the mobile broadband experience of the latter having been surpassed by LTE.

"2G is still an important source of revenue," McCormick said. "LTE provides a better mobile broadband experience than 3G, and with VoLTE [voice over LTE], LTE can handle the voice responsibilities of 3G.

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"This points to the possibility that operators opt to close their 3G networks before they close 2G."

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