GSM switch-off is good news for phone users, not for connected devices

Asian and U.S. operators are more aggressive than their European counterparts

mobile 4G LTE
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Carriers around the world are converging on 2017 as the year to turn off their GSM networks, with three operators in Singapore announcing Monday their plans to reuse their GSM spectrum for other services.

The end of GSM will free up more bandwidth for faster 3G and 4G network technologies -- but will also force users of older connected devices that depend on GSM networks to upgrade or replace them.

On Monday, Singaporean operators M1, Singtel and StarHub became the latest operators to set a timetable for turning off their GSM networks. They will do so on April 1, 2017, following in the footsteps of Telstra in Australia, which plans to do so by the end of 2016, and AT&T in the U.S, which will flip the switch on Jan. 1, 2017.

For many mobile phone users, the switch-off could pass almost unnoticed. Today, the majority of mobile customers have phones that also connect to 3G and 4G networks; only a small percentage of subscribers still use GSM-only phones, according to the Singaporean operators. When Telstra made its announcement last year, it said GSM accounted for less than 1 percent of the total traffic.

The reasons for turning off GSM networks are technical and financial. Turning them off means the spectrum can be reused by more efficient 3G and 4G networks, which can use the same bandwidth to carry more data or serve more customers -- and hence generate more revenue. Having one less network to manage should also result in lower costs for operators.

The rapid pace of phone replacement means most phones in use are ready for the switch to 3G or 4G -- but that's not the case for many connected devices, which tend to have far longer working lives. Because of its low cost and good coverage, GSM is a popular option for so-called machine-to-machine (M2M) connections used to link vehicles, alarms, vending machines and a host of other connected devices. There were about 160 million of them by the end of last year, according to Machina Research. A new generation of chipsets is laying the groundwork for cheaper LTE modems for such applications, but the majority of M2M devices shipping today rely on GSM, Machina Research CEO Matt Hatton said.

Upgrading the network will be worth it, though, according to AT&T. The higher speeds offered by 3G and 4G networks will enable enterprises to deliver better M2M applications. For example, video cameras for real-time streaming and driver dash cameras for fleet trucks will be possible.

Not all operators are as aggressive in their plans to turn off GSM. In general, European operators are being a bit more cautious. For French network operator Orange, there will no big switch off, according to Yves Bellego, director of Technical and Network Strategy at the French operator. Norwegian operator Telenor plans to turn off its 3G network in 2020, and its GSM network in 2025, it recently announced.

The reticence to make the move isn't just down to wanting to support existing M2M devices. The European operators still have lucrative roaming businesses and could run into some regulatory issues if they decide to turn off GSM networks in the next couple of years, according to Hatton.

Send news tips and comments to mikael_ricknas@idg.com

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