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13 February 2020

VodafoneZiggo sets a common pattern for Europe, sunsetting 3G before 2G

Many operators in Asia and the USA have rushed to switch off their 2G and 3G networks and make more spectrum free for 4G and 5G. Freeing up sub-2 GHz 2G frequencies helps extend coverage and may even save an operator from bidding in often expensive auctions for low band spectrum. And the 2.1 GHz band most commonly used for 3G can add useful capacity to 4G/5G options like 1.8 GHz and 2.5 GHz. Japan, Korea, Singapore, the USA, Taiwan, Australia and New Zealand are among the countries that have been through 2G and 3G sunsets, or are due to complete them in the coming year.

In Europe, the pace of sunsetting legacy networks is far slower, and most commonly, operators are looking to switch off 2.1 GHz 3G systems long before they say goodbye to GSM in 900 MHz or 1.8 GHz. Only in Switzerland are there near term plans to turn off any national 2G networks – Sunrise is the only one to have done this already, and it has only turned off its offbeat GSM2100 service, retaining GSM900 until 2021. Incumbent Swisscom says it will sunset GSM this year.

But most European operators say they will turn off 3G in the next few years, but keep at least a portion of the 2G network almost indefinitely, mainly to support well-established machine-to-machine services that do not need a 4G upgrade, such as the UK’s smart metering program.

This is the view taken by Dutch operator VodafoneZiggo, which turned off its 900 MHz 3G network last week and will refarm the spectrum for 4G, but has no plans to end 2G services. It has provided various incentives for 3G users to migrate to 4G (and crucially, to devices that support Voice over LTE, since the end of 2G/3G also means the end of circuit-switched voice). Any remaining hold-outs will be pushed back to 2G. The operator stopped selling 3G-only subscriptions back in 2017 and has been working with enterprise customers to minimize the disruption.

VodafoneZiggo also has 3G running in 2.1 GHz, but that licence expires this year and will be re-auctioned for 5G shortly afterwards. But the 900 MHz licence lasts until 2030 so is worth refarming. Dutch incumbent KPN plans to turn off 2G in 2022, but also has no date for 2G switch-off.

“The frequency space becoming available can be used far more efficiently for 4G. And that is necessary, because more capacity is needed on the 4G network since data usage of customers is rising sharply,” VodafoneZiggo said when announcing its plans in late 2019.

Other confirmed 3G sunsets for the next couple of years include Telenor, which will turn off 3G in Norway this year but keep 2G until 2025; Vodafone UK and BT, both looking to end 3G in 2022 but keep 2G until the late 2020s; and Telia, which is turning off 3G in various markets this year, and may also be an earlier mover in refarming 2G spectrum. In Sweden, all three national MNOs have set a timeline for 3G sunset (Telenor in 2020, Tele2 and Telia, which share a network, in 2025). None has announced a 2G switch-off date.

As of July 2019, a total of 20 GSM networks run by national mobile operators have been switched off completely round the world, as well as four networks using regional 2G-like technologies (NTT Docomo’s PDC in Japan, and the Personal Handyphone System used for low cost services in China, Japan and Thailand). There had also been five total sunsets of 3G UMTS networks, a number that will increase significantly in 2020.

In addition, there have been seven complete sunsets of CDMA networks. These usually affect both 2G and 3G services (the dividing line between the CDMA generations, CDMA 1X and CDMA2000, are less distinct than in 3GPP technologies).

Firm dates before 2026 have been set for sunsets of a further 15 GSM and 13 W-CDMA networks, and for three further CDMA sunsets scheduled, though the actual numbers will be larger as operators announce their plans. So far, Asia-Pacific accounts for 75% of the total sunsets across all technologies.

The most active APAC countries in sunsetting 2G are countries with very dense populations with high levels of mobile data usage, a combination of factors which has put pressure on operators to free up spectrum for LTE. For instance, all three South Korean operators turned off 2G networks (GSM or CDMA) in 2011; all three Japanese MNOs turned off 2G between 2008 and 2011; the three Singaporean operators switched off GSM in 2018; and in Taiwan, the four MNOs turned off 2G in 2017 and followed with 3G (UMTS) in 2018.

In some markets, moves to sunset older networks are being led by non-GSM operators because technologies like CDMA and Sprint’s iDEN ended up without a 4G migration roadmap of their own. That limits options for sharing spectrum flexibly between multiple generations of technology as is possible with the 3GPP standards. This has been seen in North America, especially Canada, where Bell, Telus and several regional players turned off CDMA systems in 2017 or 2018, in order to make more efficient use of their spectrum resources and avoid being left at a competitive disadvantage against their GSM-based rivals.

In the USA, Sprint turned off iDEN in 2013; Verizon Wireless is currently sunsetting 2G and 3G CDMA; Sprint has said it will do the same in 2021 or 2022, though this plan may be accelerated should its proposed merger with T-Mobile USA proceed. T-Mobile itself plans to sunset GSM in 2020. AT&T switched off 2G in 2017 in order to free up spectrum for LTE and to reduce its operating costs by supporting fewer networks. At the end of 2020, there will be no GSM networks operating in North America.

No sunset plans have been confirmed in Latin America, Africa or the Middle East. In many markets in those regions, active usage of 2G services, in particular, is expected to continue well into the 2030s, especially where rural coverage is required and where there are still large numbers of voice-centric consumers with very low cost devices.

As technologies for flexible usage of spectrum between multiple radios improve, these options are becoming easier to implement and more resource-efficient. That provides operators with the flexibility to keep increasingly small amounts of spectrum active for 2G in the years ahead, rather than engaging in a full shutdown. We expect large numbers of MNOs to keep their options open until at least 2030, especially in countries where new spectrum is becoming available for 5G at commercially viable prices, and so operators are not facing a capacity crunch in the short to medium term.

In most cases, operators with a long expected migration period are those which have significant customers using the kind of M2M services that do not readily lend themselves to 4G migration. Two Nordic operators said that the most challenging customers to convert would be those with M2M services that do not require higher data rates or lower latency than 2G supports, but have remote coverage requirements, or a very large installed base of devices to convert. In these cases, customers may be reluctant to transition to another network, because they have no incentive to do so, and when forced, may migrate to a non-cellular service.