Autor: Małgorzata Kessler

Telecom operators all over the world are switching off 2G. Within three years legacy networks will stop working, and so will IoT products incompatible with newer connectivity standards. Electronics manufacturers who have not yet transitioned must upgrade their devices as soon as possible or face tremendous business costs.

Imagine you’re on a long road trip and have just pulled to a gas station to refuel. You try to pay with your mobile wallet – it’s always quick and easy, right? – but the payment terminal fails to respond. You give it a few tries, then start fumbling for cash but can’t find enough. There’s no ATM in sight and no one to help you out.

Here’s another story. You’re driving home on a gloomy winter afternoon, feeling slightly under the weather due to a recent respiratory infection. With the air quality monitoring system helping you avoid pollution hot spots, you feel more confident. Then, as you check for real-time updates, you notice the device is not syncing. Too late, your throat is already telling you you’ve taken a wrong turn.

These cases may seem mild, but things can get a lot worse. Try to apply connectivity failure scenarios to numerous other 2G and 3G-enabled devices, including smartphones, smartwatches, smart thermostats, home security systems, health monitoring devices, vehicle tracking systems, emergency alert systems, panic buttons, and many more.

Devices dropping out of the network can lead to severe situations. Depending on the circumstances, potential harm to users, businesses, and manufacturers can be critical. This is not just hypothesizing. Connectivity-related issues are already common and bound to surge shortly due to the imminent phase-out of 2G and 3G networks.

The bottom line?

Now is the last call for IoT device providers to upgrade their products and ensure compatibility with modern networks. The longer the delay, the greater the operational consequences and reputational damage.

2G and 3G sunset: why are telcos switching off legacy networks?

Telecom operators around the world are phasing out 2G and 3G networks, with the earliest shutdowns dating back to 2011. According to a GSA report, roughly 200 companies in nearly 70 countries have either completed or are planning to shut down their 2G and 3G networks soon. The process is picking up pace, with Europe currently leading the way, followed by Asia and North America.

Some countries have already completed the shutdown, with Japan being the trailblazer (2012) and Australia and Oceania catching up not long after. Others are advancing fast, including Canada, Germany, South Korea, Sweden, and the United States. By the end of 2027, very few European telcos will still support 2G.

Below you can find the 2G shutdown timeline plan for Europe.

There are several reasons for this transition. Here’s a rough overview.

Spectrum reallocation

The radio spectrum is a finite resource. Shutting down older networks allows telecoms to reallocate 2G and 3G frequency ranges to enhance 4G and 5G standards, which offer faster connections, improving service quality.

On https://commons.wikimedia.org/wiki/File:United_States_Frequency_Allocations_Chart_2016_-_The_Radio_Spectrum.pdf you can check radio frequency allocations for the US.

Cost efficiency

Outdated networks are costly to maintain. Telecom companies choose to shut them down to reduce operational costs and focus on newer technologies that offer better performance with lower maintenance requirements.

Cybersecurity

Legacy networks are less secure and more exposed to cyberattacks compared to their successors. One of the critical 2G/3G vulnerabilities is weak encryption. On the other hand, LTE and 5G networks use advanced encryption algorithms for enhanced data protection.

Limited device support

2G networks can simultaneously support 30 to 50 devices per square kilometer. 5G can handle 191 million devices per the same area. The gap is tremendous and speaks for itself. With the booming IoT ecosystem, requiring robust connectivity, the transition to more advanced standards is a necessity.

How are 2G and 3G closures affecting IoT device manufacturers?

The imminent switch-off of the 2G and 3G networks is a critical change for many consumer electronics manufacturers (read more: https://fideltronik.com/rnd/blog/electronic-circuit-design-in-the-design-for-manufacturing-model). Organizations that have started to take notice only recently have little to no time left to initiate the transition to newer standards. Companies that want to stay competitive can’t afford any negligence. The 2G/3G shutdown will impact businesses in several key areas.

Device obsolescence

With the 2G/3G phase-out, older consumer electronics, such as basic mobile phones, wearables, and many types of IoT devices, designed to function primarily on 2G or 3G networks, will no longer be able to connect to cellular networks and become non-functional.

Customer backlash and damage to reputation

Owners of 2G and 3G devices are bound to struggle with connectivity issues, resulting in frustration and consumer dissatisfaction. This may lead to negative perception of manufacturers and brands, harming companies’ reputation if they’re slow to offer alternatives or upgrades. More foresighted competitors are likely to leverage such issues to their advantage.

Impact on support and warranty services

As 2G and 3G networks shut down, manufacturers will need to handle an increasing number of warranty claims and customer support inquiries from consumers who find their devices no longer work. This will add strain on customer service operations and result in additional costs for companies.

Comprehensive inventory assessment

Consumer electronics manufacturers must review their entire product portfolio to identify devices relying solely on 2G or 3G networks. Companies should evaluate their products’ potential for upgrade or replacement to avoid unexpected disruptions for consumers. The sooner, the better. Postponed migration to newer networks may lead to downtime: devices that rely on outdated technologies could temporarily stop functioning, affecting both consumers and businesses.

Key benefits of migrating from 2G/3G to modern networks

The essential “benefit” of the transition is pretty straightforward: either you upgrade your devices to newer standards or they will stop functioning. Keeping your products operational is not the only benefit of the migration. Upgrading to newer networks comes with several other advantages, including the following.

1. Increased data transfer capabilities

Data transfer speeds in legacy networks are dramatically low compared to 4G and 5G networks. For reference, 2G offers up to 50 kbps (kilobits per second) for download and up to 20 kbps for upload, while 3G takes it up to a maximum of, respectively, 1 Mbps and 380 kbps. 4G LTE can provide speeds of up to 100 Mbps for download and 86 Mbps for upload for mobile devices and even higher in stationary settings. 5G networks beat even that by offering speeds exceeding 1 Gbps. The gap between 2G/3G and 4G/5G is gigantic!

2. Energy savings

LTE-M (aka LTE Cat-M1), a key feature of LTE networks, offers advanced power-saving modes such as Power Saving Mode (PSM) and Extended Discontinuous Reception (eDRX). They allow IoT devices to enter low-power states when idle, extending battery life and reducing overall energy consumption. In contrast, 2G and 3G networks were not designed with power efficiency in mind, often leading to shorter battery life in devices. By transitioning to LTE, manufacturers can create longer-lasting, more energy-efficient devices, enhancing their product appeal and – what’s becoming more and more important – reducing environmental impact.

3. Improved signal coverage and penetration

LTE offers significant improvements on 2G/3G networks in terms of signal coverage and penetration. The deployment of 4G has allowed many countries to achieve north of 99% network coverage in urban areas. In addition to higher frequency bands, some 4G networks also use lower frequency bands that are better at penetrating buildings and obstacles. Moreover, contemporary LTE standard networks also utilize LTE Cat-M and NB-IoT technologies for penetration enhancement. This results in more reliable indoor connectivity for devices and enables IoT applications in less accessible environments, such as rural areas or industrial facilities.

Other benefits of upgrading from 2G/3G to newer standards include enhanced user security, long-term cost savings related to reduced maintenance, future-proofing devices and making them compatible with further technological development, and – last but not least – environmental benefits, helping businesses to reach their ESG goals.

What are the costs of upgrading from 2G/3G to an LTE or 5G standard?

The cost of upgrading your electronic products from 2G and 3G network compatibility to LTE or 5G standard can vary significantly. The ultimate price (read more: https://fideltronik.com/rnd/blog/quality-over-price-how-to-avoid-pitfalls-in-electronics-design) will depend on several factors and include the following components.

Hardware costs

When transitioning to a newer standard you can choose between 4G and 5G, with the latter offering much higher throughput, but also higher initial costs. Prices of modules vary depending on the type, features, and manufacturer. Typically though, they range from $5 to about $50 for LTE components. The transition to 5G is more expensive. Currently, 5G modules are priced at $100 or above, making NB-IoT or LTE-M modules a far more economical alternative.

Redesign and firmware costs

Additional costs for IoT device manufacturers include the integration of new connectivity technologies into their existing product lines. This is likely to involve software development and testing processes, which can add anywhere from tens of thousands to several hundred thousand dollars depending on the complexity of the devices and the scale of production.

Certification costs

Certification for new devices also adds expenses, which depend on the complexity of the device and the required testing standards. This includes compliance with regulatory requirements and network operator specifications, which are crucial for ensuring that devices can operate on new networks.

How do I upgrade my devices from 2G/3G to LTE/5G compatibility?

The upfront costs of the transition may seem daunting but migrating from 2G to newer networks is essential for business continuity. When contemplating the decision, also consider the long-term benefits, such as enhanced device capabilities and increased consumer satisfaction, which contribute to your brand’s perception and reputation. Keep in mind, though, that some of your devices may need to be replaced entirely if they are incompatible with newer technologies.

Here’s a short breakdown of the process for upgrading IoT devices from 2G/3G to LTE, performed by an experienced third-party provider.

1. Feasibility study

This is the initial stage, which takes approximately 3 weeks and involves the following steps.

Assessment of existing devices

This involves the evaluation of the current hardware and software capabilities of the IoT devices, including the analysis of the existing communication modules, processing power, and energy consumption.

Selection of components

This step involves identifying suitable LTE (or 5G if you choose an even greater enhancement) transmission modules that meet the device’s operational requirements.

Identifying potential improvements

This involves assessing the benefits of increased data transfer capabilities, such as faster speeds and lower latency, which can enhance device functionality and user experience.

2. Production of the first prototypes

The second stage of the process takes at least one month and involves the following.

Hardware design

Developing a new hardware design that will include selected LTE or 5G modules may involve redesigning circuit boards and ensuring compatibility with existing components.

MVP changes in software

This involves software modifications to support new connectivity options. The step may include updating the firmware to handle different communication protocols and ensuring compliance with new network standards.

3. Project finalization

This stage usually takes 2–3 months and involves normative testing (read more: https://fideltronik.com/rnd/blog/maximizing-quality-minimizing-risks-a-short-guide-to-electronics-testing) – a comprehensive suite of tests for ensuring compliance with regulatory standards for electronic devices, such as performance testing under various conditions and safety tests.

4. Oversight of the certification process

This involves ensuring that the IoT device meets regulatory and industry standards before it can be marketed and used on modern networks. The process length can vary depending on the target market and device specification.

5. Support for production implementation

This is the final stage, taking at least two months. It involves comprehensive assistance in scaling up production (read more: https://fideltronik.com/rnd/blog/design-for-manufacturing-how-to-ensure-smooth-transition-to-mass-production) of the newly designed devices , ensuring that manufacturing processes are efficient and cost-effective.

Cost-effective transition: how can Fideltronik help you migrate from 2G/3G to LTE/5G?

Fideltronik is the largest EMS provider in Poland, with nearly 40 years of industry experience. We specialize in offering end-to-end solutions for engineering and manufacturing, including innovative design, rapid prototyping, volume manufacturing, and after-market services.

As a design house, we have broad expertise in designing and manufacturing IoT devices. Our in-depth knowledge of IoT development allows us to streamline the upgrade process, reducing development costs and minimizing errors.

This involves using off-the-shelf components and platforms, which helps accelerate integration and reduce custom development costs, making the transition to LTE or 5G smoother and cost-effective. As part of a large EMS, we have the know-how to select the right components that best meet your project’s needs, ensuring optimal performance, reduced expenses, and long-term support.

Overall, by applying our proven development practices and industry knowledge, we can cut both expenditures and time-to-market by up to 20%.

That’s not all. In our approach, we strongly focus on fast delivery of the MVP, allowing you to validate your upgraded devices early without committing to full-scale production.

Last but not least, our expertise covers industry standards and regulatory requirements. We can help you streamline the certification process, preventing delays and costly rework while ensuring compliance.

In a nutshell, here’s what we bring to the table:
– reduced development costs,
– minimized error and delay risks,
– fast MVP development for early validation,
– faster and cheaper integration with off-the-shelf components,
– optimal performance based on our longstanding EMS expertise,
– streamlined certification with our in-depth knowledge of industry standards and compliance.

If you think you could use our assistance, feel free to reach out anytime!

https://fideltronik.com/rnd/#contact