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The future of 3G: the case for decommissioning

The future of 3G: the case for decommissioning

3G subscriber numbers are declining, and even 3G data traffic has peaked in some countries, but it still provides a useful service for the bulk of users. Based on discussions with operators at different points in the 3G/4G lifecycle, this report assesses how far operators should continue to invest in 3G.


About this report
EXECUTIVE SUMMARY
The value of 3G is questionable because 2G voice coverage is ubiquitous, and 4G offers a significant capacity boost
Decommissioning 3G networks can unlock significant benefits for operators, but faces a number of challenges
Recommendations
BENEFITS OF DECOMMISSIONING 3G NETWORKS
Decommissioning 3G networks before 2G allows operators to make use of spectrum that is suitable for providing increased capacity in urban areas
Cost savings can be achieved with refarming and without full network decommissioning
Network-related challenges to decommissioning 3G are limited
Extensive 4G coverage and spectrum use in developed markets is already making 3G decommissioning a viable option
Good profitability levels for low usage 3G subscribers may act as a constraint on 3G network decommissioning in some markets
HANDSET ISSUES
Migrating 2G handsets will present more challenges than migrating 3G handsets
2G handset migration may be slower than 3G handset migration and this is the case for Telenor Norway
The difference between the cost of 4G and 3G handsets cost is a relevant issue in emerging markets, but not in developed markets
Handset replacement cycles and handset brands are also important considerations in decommissioning 3G networks
ROAMING, M2M AND VoLTE ISSUES
Loss of inbound roaming revenue is a consideration when decommissioning 2G and 3G networks
Extensive 4G coverage and spectrum use in developed markets is already making 3G decommissioning a viable option
The implications for M2M are significant when decommissioning 2G and 3G networks
Decommissioning legacy M2M connections will involve significant cost
In many cases, the need to preserve M2M connections will significantly delay decommissioning of 2G networks
VoLTE is a barrier to decommissioning both 2G and 3G networks but could also be used to help drive the decommissioning process
ABOUT THE AUTHOR AND ANALYSYS MASON
List of figures
Figure 1: 3G share of active mobile connections, by region, 2014 and 2019
Figure 2: 3G traffic as a proportion of total mobile network traffic, by region, 2014
Figure 3: Challenges in decommissioning 2G and 3G networks
Figure 4: Mobile data traffic, worldwide, 2008–2015
Figure 5: 4G population coverage by selected developed market operator
Figure 6: Data usage per SIM for 2G, 3G and 4G by developed region, 2014
Figure 7: LG Uplus service ARPU by technology generation, 2Q 2015
Figure 8: Handsets by technology generation, Telenor Norway, September 2015
Figure 9: 2G-only handset share by selected market, end 2014
Figure 10: 3G- and 4G-enabled handsets, Telenor Norway, 2Q 2013–1Q 2015
Figure 11: Prepaid's share of connections (excluding M2M) by region, 2015
Figure 12: 4G handsets as a percentage of the total number of handsets retailed by selected operators, August 2015
Figure 13: 2G and 3G connections as a share of the total (excluding M2M), by region, 2020
Figure 14: Number of countries covered with outbound roaming by selected LTE operator, August 2015
Figure 15: M2M connections by technology, 2014 and 2017
Figure 16: Operator-retailed handsets supporting VoLTE as a proportion of total LTE handsets, by selected operator, August 2015

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