The Death Of 2G Will Impact M2M
As mobile operators migrate to future generations of technology, the long-term viability of machine-to-machine applications may be at stake.
The mobile industryís concentration on future generations of networks and devices threatens to overlook the protection of revenue-generating machine-to-machine (M2M) applications.
M2M applications are content to live in a 2G mobile world, and thatís where most of the investment in the infrastructure and devices that support them has been made. However, M2M apps are in jeopardy with the looming deadline for the shutting down of 2G networks and transitioning customers to devices that work only on upgraded 3G and 4G networks.
Shutting down 2G networks makes sense in terms of cost savings and the demand for higher network speeds, not to mention the need to free up valuable spectrum for next-generation services. But millions of M2M devices are connected to 2G networks. When mobile operators shutter their 2G networks (as AT&T recently announced it will complete by the end of 2016), many M2M solution partners may lose their ability to effectively provide applications before they can properly ramp up to 3G or beyond.
This is of particular concern in the payments sector, as companies that use M2M for payment applications find their service providers shutting off the 2G access that allows those payment applications to run. The migration to next-generation networks will force M2M providers to make costly investments to upgrade.
There are alternatives to the absolute shutdown of 2G networks. Network operators could choose, for example, to re-farm some of their spectrum to next-generation networks and keep a portion of the spectrum dedicated to M2M. Even a relatively small fraction of spectrum can support hundreds of millions of M2M devices.
T-Mobile has done this to protect its M2M customers over the long term. Continued support of 2G means uninterrupted service, continued growth, and peace of mind that M2M solution providers donít need to redesign their M2M module in the short term.
In some cases, migrating M2M services to next-generation platforms is justifiedósuch as when the applications in question are focused on video, in scenarios such as residential security or medical diagnostics. In those applications, using more spectrally efficient 3G networks make sense.
But most M2M applications simply donít require spectral efficiency. For 99% of them, including point of sale and mobile payments apps, second-generation networks are perfectly acceptable. By migrating those applications to 3G and 4G systems, carriers face the prospect of creating higher costs for next-generation M2M devices that potentially threaten end-user acceptance of the applications.
Long-term usage makes M2M profitableódevices that are deployed and sit there for a very long time supporting the applications theyíre deployed to support. If solution providers have to replace devices repeatedly, M2Mís return on investment will be destroyed for the vast majority of applications.
M2Mís ability to be a reliable, long-term provider of revenue for carriers is indisputable. The challenge now is for carriers to take steps to support the 2G M2M apps that are so critical to their business value.
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© 2013 Penton Media Inc.
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