Proving the Business Case for the Internet of Things

CTIA: M2M industry prepares for 2G sunset

Iain Morris
September 11, 2014
 
AT&T’s plans to shut down all of its 2G networks by 2017 continue to generate upheaval in the M2M industry, with hardware makers, software players and service providers alf facing growing concern among M2M customers that have long relied on 2G connectivity for their needs.

With Verizon (New York City, NY, USA) looking to switch off its own 2G systems just a few years later, M2M hardware companies have been focusing on the development of LTE technology as a 2G replacement.

Although 4G still remains costlier than 2G, prices have been falling as the technology becomes more pervasive and the likes of Taoglas (Enniscorthy) – an antenna maker based in Ireland – ramp up their 4G activities.

Showing off several new products at this week’s CTIA show in Las Vegas – including the company's Gemini-branded LTE-Advanced antenna – Taoglas’s Dermot O’Shea says 65% of his company’s work is in the US market, where customers with relatively low-bandwidth requirements are now shifting to 4G technology.

But not everyone is making the switch at this stage. “Some people are saying they will be able to afford to change the technology later on,” says Andy Do, the president of Embedded Works (Santa Clara, CA, USA), which develops and distributes low-cost GPS tracking systems. “But if 4G prices become cheap enough the move makes sense.”

Meanwhile, telecoms operators in less of a hurry to abandon their 2G networks claim to be scooping up 2G business at AT&T’s expense.

Speaking at Telit’s DevCon conference held in Las Vegas at the beginning of this week, Ross Caplan, an associate director for Verizon Enterprise Solutions, said Verizon’s M2M business has been one beneficiary of the AT&T (Dallas, TX, USA) move.

Even so, Verizon also intends to shut down its 2G network several years after AT&T’s switch-off, and the operator is focusing on driving down the price of LTE connectivity for M2M services.

According to Caplan, LTE prices are already approaching those on its much older CDMA2000 1X network.

RacoWireless (Cincinnati, OH, USA), one of the mobile virtual network operators that has sprung up to serve the M2M market, has long claimed to be the best solution for organizations concerned about 2G availability.

John Horn, Raco’s president, says his arrangements with Sprint (Overland Park, KS, USA) and T-Mobile US (Bellevue, WA, USA), which have not revealed plans for a 2G shutdown, allow Raco to cover every scenario.

Nevertheless, by driving the industry towards LTE for M2M, AT&T is largely protecting its future interests, and the operator will also be able to free up additional spectrum and reduce operating costs as it turns off much of its legacy infrastructure.

According to Machina Research, LTE modules will account for more than two thirds of all those shipped for use in wireless wide are networks by 2022, up from just 0.5% last year, as the decommissioning of 2G networks, expanding LTE coverage and falling equipment prices drives take-up.

Clearly, there is less pressure on companies using devices with a short lifespan than on those deploying equipment today that is still going to be in use beyond 2017.

As Machina notes, reliance on 2G at this stage could leave enterprises facing a costly bill for module replacement in the future.
 
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