The End of 2G at AT&T

8/6/2012

For all the back-and-forth speculation about the long-term viability of 2G, AT&T put a definitive stamp on the talk with its filing with the SEC last Friday. In the filing AT&T announced it expects to “… fully discontinue service on our 2G networks by approximately Jan. 1, 2017.”

According to AT&T, 12% of its postpaid customers are using 2G handsets and the plan is to work through a multi-year upgrade process with customers to manage the process of moving to a 3G or 4G device. In the filing, AT&T said the move is part of ongoing efforts to improve network performance and help address the need for additional spectrum capacity. The intention is to redeploy spectrum currently used for basic 2G services to help support more advanced mobile Internet services on its 3G and 4G networks. The transition, according to AT&T, will be on a market-by-market basis, transferring customers from its GSM and EDGE networks to more advanced 3G and 4G networks.

Certainly spectrum is always on the minds of the carriers these days. It was clearly part of the motivation behind AT&T’s recent acquisition of NextWave Wireless, which holds licenses in the WCS (wireless communication services) and AWS (advanced wireless service) bands. AT&T and Sirius XM filed a joint proposal with the FCC that would protect the adjacent satellite radio spectrum from interference and enable WCS spectrum to be used for mobile Internet service for the first time. This proposed solution is still currently under review by the FCC.


According to AT&T, the proposed WCS rule changes and NextWave acquisition represent an alternative approach to creating additional wireless network capacity to help support skyrocketing wireless data usage on smartphones and tablets. If approved, AT&T is expecting to begin initial deployment of WCS spectrum for added 4G LTE capacity in approximately three years.

The 2G debate is of course important in the world of M2M (machine-to-machine) where the low data rate networks play a critical role in enabling the most basic M2M applications. Carriers like T-Mobile remain committed to 2G, saying it has no plans to shut down its 2G network. John Horn, president with RACO Wireless, the preferred partner in M2M for T-Mobile, speaks often about the valuable role 2G networks play in M2M.

In fact, the company has even hinted that this commitment has helped land new customers for RACO Wireless. For example, RACO announced the addition of Apriva in early June, which manages wireless point-of-sale terminals, which use 2G networks. As RACO stated in the release, “With much of the talk in the wireless industry about 4G and LTE networks, many carriers are retiring their 2G networks and focusing their energies on 4G and beyond. This puts Apriva and the majority of M2M applications today in a tough bind as their existing M2M solutions are reliant upon 2G connectivity.”

Other carriers have released some details about their support of 2G networks, although not with a definitive date. Rogers Communications, for example, cites it will support its 2G networks through 2018, while Sprint formally announced the process of shutting down its 2G network iDEN. Verizon Wireless is also aggressively pursuing the additional spectrum route with some deals of its own on the table.
 
Many will be watching to see the type of reaction this news from AT&T generates in M2M. The role of the network and long-term viability of 2G remain up for constant debate, and now that we have some dates on the table, for at least one of the major carriers, it creates a whole new discussion.





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