Telecom Lead America: While 2G spectrum is creating
headache to operators in Indian mobile market, American telecom giant AT&T
is planning to shut 2G wireless networks by 2017.
AT&T will suspend 2G network because it is readying
to utilize its 4G LTE networks in the U.S in a big way.
Indian operators cannot afford to fully utilize and
spread 3G or TD LTE networks and shut 2G networks at present.
First, 2G networks are not old enough to stop utilizing.
Second, 2G offers majority revenue. Third, data revenue is unlikely to overtake
overall voice revenue in the near future.
Also, smartphone consumption in India is still less than
20 percent of the phones sold in India.
AT&T said about 12 percent of its contract wireless
customers used 2G handsets at the end of June 2012. AT&T will work
proactively in coming years to move them to more advanced devices.
This will be a good move for smartphone companies such as
Samsung, Apple, HTC, Nokia and Research In Motion. Samsung is leading the smartphone market in the U.S.
North American telecom Capex is likely to grow 4.9 percent to
$10.5 billion in 2013. The development will also boost the confidence of
telecom infrastructure vendors as Nokia Siemens Networks, Ericsson,
Alcatel-Lucent, Huawei, Samsung and ZTE are relying on American markets for
their mobile broadband business.
Like the other major carriers, AT&T customers mostly
use phones with third-generation technology, and it is aggressively rolling out
a nationwide 4G LTE network.
AT&T is still spending substantially on wireline
upgrades, but in 1Q-2012, wireless telecoms took 54 percent of its total Capex,
up by $454 million y-o-y to $2.3 billion, according to ABI Research.
AT does not sell 2G handsets to contract or prepaid customers.
Along with phones, the company does have some other devices connected to its 2G
networks, but it also expects that they will transition to more modern
technology in coming years.
Sprint Nextel is in the process of shutting its 2G
push-to-talk iDEN network by next June as it moves users to later generations
and aims to free up spectrum.
AT&T said the transition away from Global System for
Mobile Communications, or GSM, and Enhanced Data rates for GSM Evolution, or
EDGE, will be on market-by-market basis. Service on the networks will be fully
discontinued by about Jan. 1, 2017.
The company will manage the transition process to help
minimize customer churn, or customers cancelling their service with the
company.
