Home / Mobile Operators / Ovum says 2G/3G networks won’t close en masse until 2020

Ovum says 2G/3G networks won’t close en masse until 2020

LTE’s appeal and increased affordability means operators in developed markets have to refarm GSM or CDMA spectrum to accommodate this demand. The next step is to close down these legacy networks, but determining the “sweet spot” for network closure is challenging, according to a new report by market research firm, Ovum.

base-station

“For operators in transition, there are key revenues – M2M, voice and roaming – that need to be considered in the trade-off when determining the optimal time to close the network,” said Ovum principal analyst, Nicole McCormick. “The amount of 2G, 3G, and LTE spectrum an operator has can also affect timing.”

A few mobile operators in the US and Asia-Pacific have announced network closures. However, Ovum found that these are the exceptions.

“The majority of operators are not in a position today to close their legacy networks, nor will they be in the next 1–2 years,” said McCormick. “Rather, operators are deciding how to best manage a transition towards full network closure, given that M2M, voice, and roaming revenue cannibalization remains a pertinent issue. We don’t expect networks to be retired en masse until closer to 2020.”

Aside from important commercial factors that need to be considered, there are also cost factors that affect the timing of shutting down the network. These include the cost of migrating residual customers to LTE and the cost of maintaining an aging legacy network.

“Ovum believes that in some markets 3G networks may see closure before 2G ones. 2G is still an important source of revenue. LTE provides a better mobile broadband experience than 3G, and with VoLTE, LTE can handle the voice responsibilities of 3G.  This points to the possibility that operators opt to close their 3G networks before they close 2G,” concludes McCormick.

In Malaysia, Celcom Axiata, Maxis, DiGi and U Mobile all operates the 3G and 4G LTE network. These Telcos also operate 2G networks except U Mobile.

About Kugan

Kugan is the founder of MalaysianWireless. He has been observing the mobile industry since 2003. Connect with him on Twitter: @scamboy
x

Check Also

opensignal malaysia

Malaysians in Rural Areas spent just 44% of their time on 4G Networks -OpenSignal

Opensignal users in most densely populated districts (urban) connect to 4G networks 83.7% of the time, while its just 44% in rural areas.

slow-mobile-internet-experience

3 Ways to Enjoy the Best Internet Experience on your Smartphone

As a consumer, there's really nothing you could do to fix the 4G LTE network but here's few ways to get the best Internet experience on your smartphone.

Celcom Customers Experience Better 4G Network than Maxis in all States in Malaysia – Opensignal

Celcom customers enjoys 4G LTE coverage most of the time in all states/federal territories compared to customers on Maxis, Digi, U Mobile and Unifi Mobile.