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Introduction

LTE’s appeal and growing affordability means operators in developed markets have to refarm GSM or CDMA spectrum to accommodate demand. However, the majority of operators are not in a position today to close their legacy networks, nor will they be in the next one or two years.

Highlights

  • A few operators in the US and Asia-Pacific have announced network closures. However, these are the exceptions and due to unique circumstances. We don’t expect 2G networks to be retired en masse until closer to 2020.

Features and Benefits

  • This report qualifies what telcos should take into account when planning for network closure.
  • In this report, Ovum assess the major pros and cons of network closures, including commercial factors, network cost, and spectrum issues.

Key questions answered

  • What is driving early network closures?
  • How should operators manage the transition to network closure?

Table of contents

Summary

  • In brief
  • Ovum view
  • Recommendations

Market status

  • Don’t expect networks to be retired en masse until nearer 2020
  • From a pure capacity perspective, freeing up spectrum used for voice is logical
  • GSM will play a key role in enabling the mass take-up of M2M within the next five years
  • VoLTE will speed up the retirement of 2G networks but this is still at least three to four years away

Market dynamics

  • Commercial and regulatory factors drive network closures, but today these are exceptions, not the norm
  • The “forced” government network closure
  • License expiration forces network closures
  • The need to refarm spectrum for LTE to improve capacity and economies of scale

Network closure considerations and situations

  • Benefits of network closure
  • Barriers to network closure
  • Commercial considerations and network closure strategies
  • 2G and LTE spectrum holdings influence timing of network sunsets
  • Balancing cost of legacy service versus benefits of those services
  • The shutdown decision is multi-dimensional
  • RAN vendors are helping operators with spectrum refarming and network shutdowns

Appendix

  • Methodology
  • Further reading
  • Author

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