Why are 2G and 3G Subscriptions Growing?

Jim Machi : Industry Insight
Jim Machi

Why are 2G and 3G Subscriptions Growing?

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We all hear about LTE this, LTE that. That’s for good reason, given that LTE subscriber growth is expected to have a compound annual growth rate of more than 50 percent for years to come, which is driving a lot of device and infrastructure spending. Global LTE subscribers number in the hundreds of millions today, and by 2018 the subscriber base will have surpassed one billion subscribers. Those numbers are staggering and impressive, but they’re nothing compared to 2G and 3G. 2G today has four billion subscribers and 3G has around two billion.

That’s right – 2G and 3G are quietly hanging in there. In fact, 2G subscriptions aren’t supposed to start declining until 2015, and 3G subscribers continue to grow unabated. The world does not revolve around LTE. 

What are these new subscribers in 2G and 3G doing? Are they talking or texting or what?  Data from Ericsson Mobility Report shows that voice is modestly increasing. But some of that voice (and text for that matter) is moving to over the top (OTT), which is occurring on the data channels and can happen on 3G networks.

Is there enough infrastructure to support the subscribers on the 2G and 3G networks?  For 2G networks, at a high level, there likely is, since subscription numbers are leveling off and networks can handle the voice and text traffic. In certain cases, it might be wise to insert optimization equipment so a larger-scale 2G build out would not be needed. 

For 3G networks, it’s a little trickier. Subscribers will likely use data on these networks in addition to voice, so the networks may get clogged up, especially as more and more data usage occurs. Operators may not want to invest too much in upgrading the 3G networks since LTE is around the corner.

2G and 3G networks may still be used for voice even when LTE networks are deployed, so backhaul and voice optimization might be required to help unclog the networks. Though voice isn’t expected to account for a huge portion of the traffic, today it still generates at least 50 percent of revenue, so operators will need to make sure voice traffic gets through in good quality to protect that revenue stream as much as possible.

Hang in there, 2G and 3G – you have a lot to offer.

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