2G & 3G Switch Off Market is expected to decline to US$ 3.65 billion by 2030

Growing Demand for Smart Cities Drive 2G & 3G Switch Off Market Growth

According to our latest study on “2G & 3G Switch Off Market Forecast to 2030 – Global and Regional Share, Trends, and Growth Opportunity Analysis – by Type and Application,” the 2G & 3G switch off market size was valued at US$ 28.75 billion in 2020 and is expected to decline to US$ 3.65 billion by 2030; it is estimated to record a CAGR of -18.6% from 2020 to 2030.

Smart cities are metropolitan areas that improve citizens’ infrastructure, services, and quality of life by utilizing IoT devices and cutting-edge technologies. Smart city solutions include energy-efficient buildings, intelligent transportation systems, and smart grids. In smart cities, high-speed networks such as 4G and 5G play an important role in linking millions of devices—including sensors, lighting, and traffic lights—to a network, improving resource management, easing traffic congestion, and enhancing public safety. Governments across the globe are emphasizing the adoption of smart infrastructure and smart city initiatives. For instance, as of 2018, in China, the Ministry of Industry and Information Technology issued administrative regulations on using 5905–5925 MHz Spectrum for Direct Connected Communication on the Internet of Vehicles, which allocated the dedicated spectrum for LTE-V2X direct communication. In 2020, eleven ministries, including the Ministry of Industry and Information and Technology (MllT) and the National Development and Reform Commission (NDRC), jointly issued the Intelligent Vehicles Innovation Development Strategy, which progressed the deployment of intelligent transport systems, as well as Smart City-related facilities. Existing cellular networks do offer a wide variety of tools that address business requirements. However, Cellular Vehicle-to-Everything (C-V2X) and its evolution to 5G V2X will foster synergies between the automotive industry and other verticals moving toward 5G. Its extreme throughput, low latency, and enhanced reliability allow vehicles to share rich, real-time data, supporting autonomous and connected driving experiences. For example, LTE Cat-M and Narrow Internet of Things (NB-IoT) are excellent low-power sensor communication technologies. In order to determine and recommend individual actions to enable complex vehicle maneuvering, e.g., deceleration, lane changes, route modifications, or acceleration, the vehicles must be able to receive and share information about their driving intentions in real-time. This low-latency demand can be fulfilled by developing an overall 5G system architecture to provide optimized end-to-end vehicle-to-everything (V2X) connectivity. With smart cities, such architecture is easier to accomplish, and the vehicle can use more data to make decisions. Hence, there is a strong push for smart cities and 5G networks, which is leading to fast decline of 2G & 3G switch off market share. 

Rising Digital Transformation Across SMEs to Offer Lucrative Opportunities for 2G & 3G Switch Off Market Growth During Forecast Period

According to research by the industry association Federation of Indian Chambers of Commerce & Industry (FICCI), small and medium-sized (SMEs) firms have been adopting digital technology for various purposes. Specifically, 60% of SMEs use it for human resources, 51% for sales and marketing, and 48% for finance. The study also showed that SMEs' most popular digital tools were accounting software (Tally, Vyapar, Busy, etc.) and business apps such as ERP and CRM. Thus, several manufacturers across the globe are adopting digital transformation. Numerous production enterprises in Foshan are transforming their businesses using 5G, the cloud, and other digital technologies. Midea, Huawei, and China Unicom Guangdong are cooperating to give these small and medium-sized businesses (SMEs) the 5G connection and IT infrastructure required to increase efficiency and production significantly.

The implementation of Foshan City’s action plan for digital transformation and upgrading the Foshan manufacturing industry, launched in July 2021, is made possible by Unicom Guangdong’s 5G, cloud, and MEC infrastructure. According to the plan, Foshan will fund the digital transformation of industrial businesses with an investment of 10 billion yuan (US$ 1.48 billion) over the next three years. To accelerate the digital transformation of 3,000 manufacturing businesses, Foshan plans to construct “50 digital benchmark factories” and “100 digital benchmark workshops” by the end of 2023. Thus, such rising digital transformation across SMEs creates opportunities for using higher networks and promote 2G & 3G switch off market growth.

North America holds a prominent share of the 2G & 3G switch off market. The North America 2G & 3G switch off market is segmented into the US, Canada, and Mexico. According to the Cellular Telephone Industries Association (CTIA), a US wireless communications industry, ~9% of wireless connections in the US are 2G or 3G. Operators across the region are motivated to switch off to save money on operating expenses and repurpose the freed spectrum for next-generation mobile technologies like 5G. As of 2022, all US operators, including Verizon, T-Mobile, and AT&T, have shut down 3G networks. Verizon shut down its 3G network in December 2022 and AT&T in February 2022.

As of December 2022, various businesses in Canada, such as Bell, Telus, and Rogers, all stopped supporting 3G. Rogers, Canada’s main mobile operator supporting the 2G network, retains the 850 MHz band for 2G GSM and 3G W-CDMA services. Still, the company’s 2G network is only used in remote areas outside the 3G network footprint. Thus, such a shutdown of the 2G and 3G services promoted the 2G & 3G switch off market.

2G & 3G Switch Off Market: Segmental Overview

The 2G & 3G switch off market is categorized based on type and application. Based on type, the 2G & 3G switch off market is bifurcated into 2G and 3G. The 3G segment had a larger 2G & 3G switch off market share in 2020, and the 2G segment is declining faster. In terms of application, the 2G & 3G switch off market is segmented into message, voice, data, and IoT. The IoT segment is decelerating at the fastest pace as industries are shifting to 5G-enabled devices. By geography, the 2G & 3G switch off market is segmented into North America, Europe, Asia Pacific (APAC), the Middle East & Africa (MEA), and South America (SAM). APAC is adopting 5G at the fastest pace and has a faster-declining rate of 2G & 3G switch off market.

2G & 3G Switch Off Market: Competitive Landscape and Key Developments

AT&T Inc, BCE Inc, China Mobile Ltd, Deutsche Telekom AG, KDDI Corp, NTT Data Corp, Orange SA, Telefonica SA, Telenor ASA, and Vodafone Group Plc are among the key players profiled during this market study. In addition, several other essential market players were also studied and analyzed to get a holistic view of the global 2G & 3G switch off market and its ecosystem.

• In September 2023, Orange announced it would begin switching off its 3G network in six counties at the end of September to re-farm spectrum and enhance its LTE network to serve growing demand. 96% of data transmissions in the company’s network went through LTE, and over the last few years, the share of 3G traffic decreased from 26% to ~2.5%, prompting plans to switch it off.
• In July 2023, Singtel, StarHub, and M1 unveiled plans to shut down their 3G networks from 31 July 2024 in Singapore, with all three to repurpose the spectrum to improve 5G services. In a joint statement, the operators noted they have been pressing 3G customers to migrate to 4G or 5G services and plan to implement measures in the coming months to help users shift to other networks.

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