Telstra might have already announced in mid 2014 it is shutting down its 2G network in Australia by the end of 2016, but it will apparently be one of the very few telcos to do so.

Research firm Ovum states that LTE’s appeal and its increased affordability ‘means operators in developed markets have to re-farm GSM or CDMA spectrum to accommodate this demand.’

Indeed, Ovum thinks some operators might close down their 3G networks before they close their 2G networks due to LTE doing a much better job at data than 3G, and with VoLTE pending, can take on voice as well.

However, whatever happens with the exact 2G and 3G network closure timeframe, the next step is to close down these legacy networks. It will happen.

That said, determining the ‘sweet spot’ for network closure is the challenge, according to Ovum’s new report, entitled ‘2G/3G Migration Strategies’, which it no doubt hopes telco operators will buy. 

Nicole McCormick, Ovum’s principal analyst said: “For operators in transition, there are key revenues – M2M, voice and roaming – that need to be considered in the trade-off when determining the optimal time to close the network. The amount of 2G, 3G, and LTE spectrum an operator has can also affect timing.”

Ovum does note that there are operators in the US and Asia Pacific who have announced network closures, but these are exceptions to Ovum’s expectations.

McCormick explained: “The majority of operators are not in a position today to close their legacy networks, nor will they be in the next 1–2 years.

“Rather, operators are deciding how to best manage a transition towards full network closure, given that M2M, voice, and roaming revenue cannibalisation remains a pertinent issue. We don’t expect networks to be retired en masse until closer to 2020.”

Naturally, while there are important commercial factors that need to be considered, Ovum says there are also cost factors that affect the timing of shutting down the network.

These include the cost of migrating residual customers to LTE and the cost of maintaining an ageing legacy network.

McCormick concludes: “Ovum believes that in some markets 3G networks may see closure before 2G ones. 2G is still an important source of revenue.

“LTE provides a better mobile broadband experience than 3G, and with VoLTE, LTE can handle the voice responsibilities of 3G. This points to the possibility that operators opt to close their 3G networks before they close 2G.”