Verizon, Sprint, T-Mobile to gain M2M customers from AT&T's plan to shut down 2G network

AT&T to continue to lead in M2M cellular connections in the US over next five years, says ABI

AT&T's (NYSE: AT&T) plans to shut down its 2G network are pushing machine-to-machine (M2M) customers toward Verizon (NYSE: VZ), Sprint (NYSE: S) and T-Mobile, according to a new report by ABI Research.

As FierceMobileIT reported last year, AT&T plans to shut down its 2G service by 2017 in order to free up spectrum for its 4G LTE services. "Well in advance of this change, we will reach out to our relatively small percentage of 2G customers and offer them options to meet their needs," an AT&T spokesman said in a statement at the time.

Because many M2M customers are still using 2G networks, ABI practice director Dan Shey predicted that AT&T's decision will help the carrier's competitors gain M2M customers. "Verizon and Sprint will take all the 2G business they can get but their goal is to move 2G customers to 3G and 4G technologies. The dilemma is how to move dedicated 2G customers to 3G and 4G connections."

T-Mobile is expected to experience the highest growth in 2G connections, despite being less focused on value-added, end-to-end M2M services than its competitors, according to ABI.

At the same time, AT&T is forecast by ABI Research to maintain its lead in total U.S. machine-to-machine cellular connections over the next five years.

"Several factors contribute to AT&T's current and expected leadership position in M2M connections," Shey explained.

"First, it has a dominant position in certain verticals that are expected to grow, several which prefer GSM because of its worldwide presence. Second, it has built competencies in M2M services further up the stack which expand its appeal to a broader set of customers. Finally, as demonstrated by its recent win of the GM OnStar contract, it's doing a better job selling a vision for key market segments which is exciting OEMs and businesses," he added.

For more:
- see ABI's release

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