CeBIT: Analysts weigh in on 2G, 3G in M2M

On Thursday at the M2M Zone conference at CeBIT, top analysts in the machine-to-machine (M2M) industry weighed in on the 2G versus 3G and 4G debate in M2M.  Overall, it seemed everyone agreed that a viable option would be to keep 2G and instead turn off 3G networks.

“It makes the most sense to switch off 3G,” says Matt Hatton, director of Machina Research (London).  Hatton said that some telecom operators are starting to look into the option. By switching off 3G networks, the belief is that 2G will function for small data such as M2M services, while 4G will be used for capacity.

Robin Duke-Woolley, founder and CEO of Beecham Research (London), agreed with Hatton, saying the industry should wait for 4G to become more mature and then shut down the 3G networks. According to Duke-Woolley this would take place in around 2016 or 2017.

Ansgar Schlautmann, a principal at Arthur D. Little, pointed out that the maturing of the 4G network will take time, as it is hardly rolled out yet and is scattered in terms of megahertz bands. 

“We are going to have 2G for a longtime in general,” says Schlautmann.

Despite the belief that 2G will stay around, some carriers such as AT&T (Dallas, Texas, USA) have taken major steps to shut down 2G networks.  AT&T is no longer certifying 2G modules and just recently asked all 2G customers to upgrade to 3G. 

The effect, according to Duke-Woolley, is that the CDMA market has grown, as well as T-Mobile’s customer base. 

“It’s counterproductive to force the market into something it doesn’t want to do,” says Duke-Woolley.

Not only is it counterproductive, but it has the potential to effect the M2M industry in a negative way since many products currently deployed are based on 2G technology.

“Telcos will need to take that into consideration,” says Schlautmann.

In a separate interview at CeBIT with Cyril Zeller, senior sales director of the global telematics segment at Telit, weighed in on the carriers indecision on the 2G network.

“It creates turmoil in the market because nobody knows what to design,” says Zeller. “Should we design 2G, 3G, CDMA, GSM, nobody knows.”

It seems for now that the fate of the 2G network in the hands of the telecom network providers.  But everyone seems to agree that no matter what network is shut down a decision needs to be made.

“It’s not the technology choice,” says Hatton.  “It’s the certainty of the technology choice.”

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