PwC study finds peril for IT managers in wireless network decommissioning plans

Report finds that wireless network operators are frequently unaware of how IT shops use wireless networks.
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A study by PricewaterhouseCoopers has found that 60 percent of wireless operators plan on decommissioning their legacy networks over the next five years. An example of these decommissioning plans can be seen in AT&T's announcement that it would end 2G service before 2017, and in Sprint's decommissioning process, which is eliminating its iDEN network. It is already underway and will be complete by June of 2013.

According to Dan Hays, principal and US wireless advisory leader at PwC, wireless networks are rushing to decommission 2G, and some 3G networks, over the next five years. "In general, network decommissioning is driven by a number of factors," Hays said. "but primarily it's reducing operating costs. It's increasingly expensive to maintain multiple generations of equipment." Hays published his findings in a report available from PwC.

"Network decommissioning is a game of leapfrog," Hays said. "Once 4G is at critical mass, operators will decommission 2G and move to 4G."

But Hays said that in some cases the operators are paying scant attention to the needs of their customers, especially the needs of enterprise IT departments. He said that this is especially the case when companies use 2G and 3G data for something besides handsets. That can include everything from machine to machine communications to telemetry to remote diagnosis for service calls.

"There is good reason to be concerned about the timelines and the availability of devices," Hays said. "Concerns about existing customers don't rank very highly among operators major concerns. The niche users of 2G networks are a small minority of existing users. The expectation is that if we're able to provide replacement devices, those transitions will be enabled."

While enterprise users may make up a small percentage of a wireless company's user base with their smartphones and tablets, those 2G and 3G data users have millions of dollars invested in wireless devices that aren't phones. In addition, Hays noted that a large number of enterprises have installed in-building systems that work with those 2G and 3G networks that are being shut down. Companies that aren't prepared will simply lose communications.

"One concern for customers are in-building systems for major facilities, and those will have to be upgraded as network technologies evolve," Hays noted. "Some in-building customers have dozens of facilities and will have to keep ahead of decommissioning."

Adding to the problem is the fact that wireless companies really don't know what their customers do beyond using handsets and smartphones. "One thing I can tell you is that they in general the operators are not always aware of the true nature of the devices connected to their network, especially if they're provided by a third party," Hays said. "Sometimes they're only visible as a data user. It's a challenge for mobile operators to really understand the diversity of uses that is taking place over their networks."

"Users of M2M communications need to be looking to the future and how they're going to sustain their operations," Hays said. "A lot of times there's a here and now kind of thinking. What can I do today? The rate of evolution is such that these enterprises need to be thinking 10 years out."

Hays also said that the problem of band fragmentation has become a significant issue for companies that want to move their communications to LTE. "It's going to be a while before LTE becomes a global standard," he said. Hays said that this is especially a problem for mobile devices that use legacy communications, for which there's no obvious LTE solution. "Aircraft engines are a big user of M2M communications," Hays said, "they use 2G." Hays noted that it would be very difficult to move such inherently mobile devices to LTE right now.

Hays said that it's critical for companies to contact the carriers with which they do business and find out their decommissioning plans. He said it's also critical to know their LTE plans in detail so that they can start planning now, even though they can't yet move. "You can't migrate to LTE today," Hays said. "The networks and chipsets just aren't available." Hayes also noted that companies should work with their carriers to get assistance in their move away from networks that will be decommissioning, and to ask for help, both technical and financial.

Related Articles:
AT&T announces end of 2G service by 2017
Sprint may shut down iDEN service as early as June 30, 2013