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Pondering the Future of 2G M2M Networks

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Wireless Week recently published an article on the current state of 2G M2M networks pontificating about what the future will hold for M2M applications and devices residing on 2G, particularly given AT&T’s plans to transition this spectrum by 2017 in North America to 3 and 4G.

The article highlights some interesting facts/predictions from Cisco’s Annual Data Forecast report, namely:

  • 64 percent of global mobile M2M connections rely on 2G connectivity today
  • 35 percent are connected via 3G
  • 1 percent are connected via 4G

Based on these numbers, one’s first instinct may be to question AT&T’s rationale behind shutting down its 2G network service. As with all major business decisions, it’s not entirely black and white.  Managing multiple networks, limited spectrum and optimizing their usage from a business perspective can be challenging, particularly when the iPhone or Android wielding data-hungry consumer paying large monthly recurring services fees is their primary customer acquisition target.

This all raises possibly the biggest question in the 2G debate — how will the AT&T 2G shutdown impact the roaming options of M2M devices still residing on other 2G networks outside of North America? AT&T currently boasts a very large 2G footprint, forcing M2M device or application providers to consider how the transition may impact mobile M2M devices that require cross-border roaming to work as they plan for the future. In fact, the same Cisco report predicts that by 2017, only 32 percent of global M2M modules will operate on 2G networks, with 59 percent residing on 3G networks.

The reduction in the cost of 3G devices has decreased in recent years, making the migration to 3G more economical for new devices to replace 2G devices at the end of their life spans. While applications such as fleet tracking may not require 3G data speeds for normal connectivity, the future-proofing provided by hybrid 2G/3G devices ensures interoperability for tomorrow.

As for the consumer-driven LTE networks, early indicators are that the broader M2M market will likely take its time converting to this high speed network variant. Interoperability around the supported frequencies for LTE remains unclear. This point, when added to the limited need for ultra-high bandwidth M2M applications as well as the length of time required to realize an ROI with this technology costs likely means that widespread LTE M2M is still several years out.

At KORE, we believe that 3G is the logical evolution for reliable, cost-effective and ubiquitous M2M connectivity. However, there are still great 2G coverage options outside of North America for M2M. And as always, we will work tirelessly to ensure that each customer’s unique M2M connectivity requirements are met, whether that is via 2G, 3G, 4G or satellite.

By Felix Chuang, Senior Product Manager

Felix Chuang is Senior Product Manager at KORE Telematics, an industry leader in the Machine-to-Machine (M2M) wireless market. He has more than fifteen years of experience in the Internet and wireless industries in a broad range of roles such as product management, business development, and operations.  He is currently focused on the KORE Global Connect product line, which provides a single SIM for M2M network service in 180+ countries and 230+ carriers.

He can be found on twitter at: @felixc and KORE Telematics can be found at: @koretelematics