There has been the talk of the 2G shutdown for a few years now. Some insist that moving directly to 4G LTE is better, since the longevity of 3G is uncertain. Additionally, traditional carriers primary focus is to deploy 4G LTE rather than expand any coverage of 3G HSPA. Therefore, one thing is certain: you will need to swap out your AT&T 2G devices by January 1, 2017, since US carriers are facing a spectrum crisis that will force them to re-farm 2G GSM spectrum for use by 4G LTE. Just in time, Aeris has created an easy-to-use calculator to help you plan your 2G exchange. Customers must carefully balance their product lifecycle, device cost, and market deployment requirements to select the correct technology for their M2M application.To determine how fast you need to switch out your devices, enter your information into the 2G Swap Calculator to get started.
Not sure what to do next? Lets look at your options for the AT&T 2G shutdown:
- Change service to another 2G GSM carrier using the same 2G GSM device
- Replace the 2G GSM device with a 3G HSPA device
- Replace the 2G GSM device with a 2G CDMA device
- Replace the 2G GSM device with a 4G LTE device
However, moving current 2G GPRS devices to just 3G HSPA/HSPA+ is not a viable business option for IoT applications that need technology longevity, since the 3G HSPA/HSPA+ network will also be replaced with 4G LTE.
Dont forget about the cost of radio upgrades
A blog post by Aeris CTO, Syed Zaheem Hosain, outlines the cost of switching out 2G devices. He maintains that, even assuming that we can ignore the following, switching out devices can be costly:
- The cost of designing a new 3G or 4G device (since the module command set, form factor, power requirement, etc., of a new module is likely to be different from existing 2G modules),
- The ability to add any additionalnew2G units (some carriers already do not allow this), since the customer may be busy swapping out their existing 2G devices over the next two years.
- The length of time, it takes to get anewdevice designed, certified, and into production.
- The total cost of building the new devices, even whenexcludingthe radio modules.
For example, if ten thousand replacement radio module devices were to be exchanged here are the costs for the various wireless technologies:
- 2G: approximately $120k to $150k (the deployed sunk cost of existing units),
- 3G: would be about $400k, and
- 4G: would be about $1.25M to $1.5M.
Replacingexisting2G GPRS devices with new 3G or 4G devices will be a large cost burden on IoT customers. Given the low Average Revenue Per Unit (ARPU) of IoT applications, the margin from services may not be sufficient to cover the cost of device replacements, especially if they areunableto pass these replacement costs through to their end-users.
Where Do We Go From Here?
There are ways to plan for the 2G sunset that helps manage costs more effectively. To learn more about these options and the cost involved, read the2G GSM Sunset Whitepaper. Dont want to read the whitepaper? You can see asummary of your optionshere. Check out our new2G Sunset pageto read more about the sunset, tabulate how many devices you must replace a day to be ready, and learn more about your alternatives.