Preparing your business for the 2G/GSM network shut down in Australia

Preparing your business for the 2G/GSM network shut down in Australia

The current state of 2G/GSM Networks As many of you are probably aware, Cellular network operators around the world are planning to shut down their 2G networks to re-farm spectrum for more efficient 4G/LTE services. In the USA, AT&T plans to shut their 2G Network by January 1st 2017. Singapore is one of the first countries in the world to have all 2G networks shut down at once with M1, Starhub & Singtel announcing a joint shut down on April 1st, 2017. Here in Australia, Telstra’s 2G will be shut down on December 1st 2016, with Optus to following suit with their 2G network closure on 1st April 2017 and finally Vodafone Australia closing the remaining 2G network on 30th of September 2017 (Click here for more) Research firm Berg Insight theorize that globally 3G & 4G/LTE technologies will dominate cellular M2M communications by 2018. Pointing to the declining use of 2G by M2M developers in favor of 3G and 4G/LTE technologies, citing the greater reliability, coverage and speeds as the major drawing factor. LTE in particular delivers peak speeds of up to 100 Mbps allowing for faster transfers and better handling of more data intensive applications like video cameras or digital displays. The majority of mobile networks that are shutting down 2G have plans to re-farm spectrum for additional 4G/LTE network capacity. The business driver behind this decision is that it consolidates and makes more efficient use of their networks resulting in lower operating costs, fewer networks to support, and frees up spectrum for faster more lucrative services. So why is 2G so popular with M2M/IoT? The closure of 2G networks has the largest impact in the M2M space with an estimated 70% of M2M devices worldwide still utilizing 2G technologies. The major factor behind the prevalence of 2G devices in the M2M/IoT space is a simple one, cost. Not as simple are the factors that make up the costs behind an M2M device: Hardware Cost – The fact that 2G modems are less expensive than 3G modems should come as no surprise, it’s not very often that an older technology commands higher prices than it’s successor. The problem in the hardware space has compounded by the ‘Qualcomm tax’, due to the high volume of patents related to 3G owned by Qualcomm the price for 3G modules and modems has remained relatively static, and only recently as companies have got more economical with other elements and 4G/LTE development is ramping up, has the cost started to come down closer to 2G pricing. This has meant that a lot of businesses that probably should have been developing with 3G technology 2 or 3 years ago have put it off to avoid raising prices. The problem now is that businesses have a much shorter development time frame due to the impending 2G shut down. Lifecycle – M2M data needs are typically light compared to consumer applications that require the faster speeds and bandwidth of 3G and 4G/LTE so the lifecycle of a field device can be anywhere from 3-10 years compared to an average phone or tablet, which is replaced nearly yearly by most consumers. Upgrade costs – The nature of most M2M devices is that they are deployed in either very remote areas and connected to mobile assets, in countries with large remote areas like Australia the cost of sending a person out to upgrade or change a device can be in the thousands, even tens of thousands of dollars. Customer Perception – With customers conditioned to think that prices should come down over time, businesses working on a very thin margin have found themselves in a precarious position as the cost of deploying 3G increases their costs, but their customer base is unwilling to pay for what they feel is an ‘unnecessary’ upgrade. This has meant several businesses have decided to keep 2G technologies in place longer than their initial roadmap might have dictated. So where do we go from here? There is no doubt about it, with development times in M2M/IoT ranging from 6-18 months for new solutions. M2M system vendors in Australia need to make a decision now on the next iteration of their solution. While some companies are choosing the ‘mystery box’ and gambling on Vodafone Australia maintaining it’s 2G network, the majority of companies we work with across M2M One are looking at 3G & 4G/LTE upgrade paths. What are your upgrade options? Build vs. Buy – The first question you really need to ask yourself is whether you need to build a new product from scratch or if a solution already exists that can save you development time and cost. M2M-modules-image The problem with upgrading a 2G solution from a module level is that most 2G modules have a completely different form factor, where most major modules suppliers now keep a common form factor for 3G & 4G/LTE – This often leads to a complete redesign of your base board, which adds time and money to the upgrade. A lot of businesses that were early adopters of M2M/IoT from the 2G or even Circuit Switch Data (CSD) days had to develop their own solution, as nothing was available. Now we live in a time where M2M hardware has a level of standardization in terms of inputs and functionality meaning it may be cheaper and easier for businesses to go from building a solution from a board level upwards to perhaps buying an off the shelf finished modem or even a complete product and white labeling (this is becoming increasingly popular in the competitive vehicle tracking and telematics space). 2G to 3G – The most immediate fix for the majority of businesses is to make the jump from 2G to 3G. The good news is that the cost of developing a 3G M2M device has reduced considerably making the process slightly less painful. With quad and penta-band 3G modules on the market now, you can build a device that can be shipped anywhere in the world without having to worry about your base module. The major consideration here is the rapid growth of 4G/LTE, with coverage set to match and surpass 3G in the coming year a lot of people are questioning the long-term future of 3G, while none of the carriers are making any statements regarding this. We have been advising customers that if they plan to have a device in the field for 10 years or more they should be using 4G/LTE to be safe. 2G to 4G/LTE – As coverage grows the idea of leapfrogging 3G altogether and going with a pure 4G/LTE solution or a solution that is 4G/LTE with 3G fallback is looking like the most sensible path for a majority of solution providers. While a lot of M2M devices don’t need the added speed that comes with 4G/LTE the greater coverage, capacity and reliability of service is a huge draw. Several module manufactures and networks are discussing M2M specific operations on LTE Cat-0, a lower bandwidth M2M specific subset of LTE which will reduce both module and data costs. This isn’t to say 4G/LTE doesn’t bring it’s own difficulties along with it. While LTE modules are expected to drop in price much quicker than their 3G counterparts, they are still reasonably expensive compared to 2G. Another headache is the number of LTE bands currently being used; there are currently 32 LTE bands in use with 44 including LTE-TDD. There are currently no easily accessible modules on the market that will cover all LTE bands, which means deploying a global single SKU M2M device is currently impossible on LTE. Several countries have common bands making regional applications possible, but for a true global option your choices are limited. Where do I get started? The best place to get started is to speak to your supplier about upgrade paths, every module and modem supplier in Australia will be able to give you a number of options for upgrading your existing product and you might be pleasantly surprised by the ease and cost of some of these. If you don’t have contact with a supplier, most mobile network operators will be able to supply you with a list of approved hardware and integrators that can assist. Some may even assist with discounts, subsidies or consolidation of services as they want to minimize the number of 2G connections come shut down time. Of course M2M One are always here to help, we have connections to most of Australia’s leading M2M/IoT hardware providers and our team of M2M network experts can assist with helping you create an upgrade path that works for your business.

Did you find this information useful? Do you have some questions on the Australian Machine-to-Machine and Internet of Things market we can answer for you? Let us know on Twitter @M2MOneAU, on LinkedIn at M2M One or visit our website at

James Mack

General Manager – M2M One

The views and opinions expressed in this blog site are solely those of the author and do not necessarily reflect the opinions of M2M One or M2M Group.

Sunset of an Australian 2G/GSM network and the implications for M2M

Sunset of an Australian 2G/GSM network and the implications for M2M

In a recent blog post, Australia’s largest network has announced that they will close down its 2G GSM network by the end of 2016, and this announcement to shut down the 2G/GSM network has implications for M2M One customers with 2G 900MHz GSM/GPRS modems.

M2M One customers with 2G devices have the opportunity to utilize 3G 850MHz as the best short immediate alternative.  All areas of Australia that are covered by the 2G network are already fully covered by 3G service, which also extends well beyond the 2G coverage footprint. Other than 3G network offering wider coverage than 2G network, 3G technology is more reliable and much faster.  The downloading and uploading speeds available in 2G technologies reach up to 236 Kbps compared to 3G technology where the downloading and uploading speeds are up to 42 Mbps and 5.7 Mbps respectively.

While 3G M2M devices may have been perceived as costly in the past, costs have reduced considerably making 3G devices very affordable.  Many of the 2G M2M devices currently used for vehicle and asset tracking can be replaced by 3G M2M devices which offer the benefits of 3G resulting in better asset tracking and monitoring.

LTE or 4G networks are already being rolled out and are expected to be fully operational before the 2G shut down.  Currently, the choices of 4G M2M devices are limited due to the relatively recent introduction of 4G technologies and networks.  Carriers are conducting trials of newly purchased 4G spectrum around the country with a view to expand 4G use into the future.

M2M One customers affected by the shut down 2G/GSM network who are seeking solutions/alternatives for their 2G/GSM devices are advised to contact a 3G/4G LTE device vendor.

Shortly M2M One will start to contact customers who may be affected by the 2G closure to explain the changes, and to discuss transitioning to 3G and/or 4G. M2M One can also be contacted for assistance.

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