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Intelligence Brief: What does 2021 hold for network sunsets?

One of the most visible impacts of Covid-19 (coronavirus) has been the increased usage of digital technologies, making high-speed internet access more important than ever. Building robust infrastructure, maintaining resilient networks, attaining wide 4G coverage and preparing 5G networks have become essential components of fulfilling today’s network requirements.

To execute on these requirements, operators need access to spectrum in new and existing bands. Only if it was this easy. With only about 40 markets opening access to new spectrum bands for 5G by the end of February 2021, operators must explore new ways to find the required bandwidth.

One such way is to trade-off existing spectrum bands from older generations of technology to newer generations: shutting down an older generation network, a network sunset, becomes a way to support a newer generation.

GSMA Intelligence data shows from now to 2025, more than 55 2G and 3G networks will be closed, allowing operators to plan for 4G and 5G.

With network sunsets becoming one of the key ways to support 5G launches and 4G expansions, it is important to understand the benefits operator derive

Mobile broadband coverage. The key frequency bands to provide 2G and 3G services (900MHz, 1800MHz and 2100MHz) are the low- and mid-bands, thereby offering greater coverage and capacity. This makes them ideal candidates for network sunsets as operators can use these bands, combined with mid- and high-bands, for coverage and expansion of their 4G and 5G networks. Some operators, with large 2G/3G footprints, for example, are already refarming these bands to deploy and expand higher technologies
Expenditure efficiencies. Ageing 2G/3G networks eat up a significant portion of an operator’s capex and opex, with investments and expenses not justified by the ARPU. Hence operators around the world have preferred to focus their investments and resources on increasing their 4G coverage on fully digital technologies like VoLTE by sunsetting 2G/3G and using those frequency bands.
Roadmap for vendors and manufacturers. With an increasing number of operators using sunsets to support new launches and the expansion of existing networks, it is imperative for operators to have a well-defined strategy and roadmap around this. Timely announcements by operators also acts as a guide for vendors and manufacturers, driving their strategies, R&D and investment decisions, as well as manufacturing decisions based on regional advancements.

This makes a strong case for networks sunsets across all the markets. But does this mean the trends are consistent across the globe? Not at all. Different regions depict different trends (see chart, below, click to enlarge).

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Europe: 3G eclipse
Europe is experiencing more sunsets in 3G than 2G. A total of 19 operators in 14 nations plan to switch off 3G by 2025, whereas only eight operators in eight countries are planning a 2G switch off by same time. The sunset saga in the region started with Net1 being the first operator to completely shut down its 3G networks in Denmark and Sweden in 2015, followed by VodafoneZiggo in 2020, then Telenor Norway and Swisscom in 2021. Though 3G is newer, it is still retiring in the region because 2G has dished out a notable edge, especially for M2M and IoT services in countries including Germany, Finland, and Belgium.

Americas: Goodbye 2G
The Americas is on a different path from Europe, focussed towards turning 2G off: there has not been a single 3G closure. The region, an early adopter of new technology generations, has seen 13 operators across five countries launching their 5G networks, making it vital to have the required spectrum to foster the services. Here we expect 15 operators in seven countries to switch off their 2G network by the end of 2025. Putting the best foot forward, the operators are re-using their existing spectrum from 2G to fill in the demand for 4G and 5G networks

Asia: 2G departure
Service providers in the region are vying to retain their 3G networks and shutting down 2G instead to employ the infrastructure for 4G, which has high adoption. By the end of 2025, we expect 29 operators to shut down 2G and 16 operators to close 3G with Taiwan currently the only market which has witnessed both 2G and 3G sunsets, in 2017 and 2018 respectively.

Africa: Preserving 2G and 3G
In this region, 2G markets outnumber 3G twofold, basic feature phone still comprise 42 per cent of all devices and end-users are incentivised to remain on them given lower costs. In turn, this drives lower digital uptake, explaining why a negligible number of sunsets have been announced. Of course, as demand rises, we would expect operators would have to plan for them in future.

Oceania: Precedence for 2G
The way to 2G in Oceania was paved when Australia and New Zealand launched the service in 1993, while 3G knocked on the door in 2004. The region has been quick enough to migrate to newer generation networks as 5G services are available in four countries, whereas others are testing the network for commercial deployments. Today, 2G networks account for only 5 per cent of total connections, having very small amount of traffic across the region. As a result of this trend, Australia, the biggest market in the region, completed its 2G network sunset in 2018. Though operators have not announced their network sunset plans, we expect the region to see more 2G than 3G closures, based on representative shares.

While we expect network sunsets to be an important strategy for operators, one approach is not appropriate for all everyone. Europe, for example, is the only region focused on switching 3G off, while others have a preference to shut 2G. The uptake and usage of different generations of technologies in respective countries and regions, in turn, defines sunset plans for operators. For vendors and manufacturers, timely announcements of these sunsets are integral, as they act as a guide to help them make manufacturing decisions and roaming infrastructure deployment.

And, as 5G gains mass adoption, all eyes will be on how operators shut down the older generations and switch to newer generation of technology.

– Akanksha Hira and Saksham Agarwal – research analysts, GSMA Intelligence

The editorial views expressed in this article are solely those of the author and will not necessarily reflect the views of the GSMA, its Members or Associate Members.

[1] https://www.mobileworldlive.com/wp-content/uploads/2021/03/GSMAi_network_sunsets.jpg