Industry Voices

The 2G Sunset Has Begun

January 17, 2012

In response to consumer demand for faster speeds and greater bandwidth, national cell carriers in early 2011 revealed their plans to migrate fully from 2G to 3G mobile telecommunications. The implication is that the phasing out of 2G–GSM technologies has begun. This forthcoming “2G Sunset,” during which GSM and GPRS technologies will be rendered obsolete, will have sweeping implications for our industry.

This, of course, may not be welcome news to those security dealers who have spent much of the recent past adapting to the decline of landline telephone service. The uncomfortable reality, however, is that when you sell your customers 2G-based monitoring equipment, you are providing them with a fading technology.

Fortunately, it’s likely you’ll have ample time to prepare your business for the technological advances to come, but doing so will require prompt action on your part. How should you prepare, and how much time do you have? As is so often the case, history is the best guide.

Radio spectrum is an aggressively managed resource for cellular carriers. Whenever an older generation technology starts sharing spectrum with a newer one, the older one will eventually be eliminated within 15 years. AMPS shared spectrum with GSM for 13 years before the infamous Analog Sunset; GSM already has been sharing spectrum with 3G for 10 years. Given these facts — and given that cellular carriers have already stopped certifying any new GSM-only devices — we anticipate that the 2G sunset could culminate within five years. That means a complete and total elimination of the 2G platform, and that means your 2G installations must be brought up to date. Churn rates within the industry simply aren’t high enough for you to ignore what’s ahead.

The temptation will be to take no action now; after all, five or so years feels like a long time. But consider this scenario: An independent dealer continues doing business as usual. He or she goes on installing 2G-based equipment for his new customers in spite of the changes ahead, and thus the dealer increases the number of devices that eventually must be replaced. Will some of your customers go dark because you made too many new 2G installations and thus lack the capacity to bring your entire client base up to date before the sunset?

Such a passive, reactive approach will have consequences. The sunset deadline approaches, and your existing 2G installations become significantly less attractive to nationwide suppliers seeking to purchase accounts. As well, your “truck rolls” increase dramatically as you scramble to update alarm communicators. In other words, failure to act now likely will damage your brand and reduce your RMR stream.

Time was when even dealers who anticipated these upheavals could do nothing; 3G cellular communicators simply didn’t exist. Now, however, cellular providers like Telguard — companies that rely on RMR just as you do — are already offering the full complement of 3G solutions because they believe the sun-setting of 2G is underway. As a result, the independent security dealer has an increasing amount of control over how much his or her business will be disrupted by the looming 2G sunset.

The first step is to contact your cellular equipment manufacturer and ask for the company’s 3G roadmap. Are they prepared? Do they have 3G solutions available to you immediately?

Also important is the use of modular systems, which have distinct rather than bundled components. For example, consider the old TV-VCR combo units. Once DVD technology captured the market and rendered VCRs obsolete, combo-unit owners were forced to replace the television and the VCR. Similarly, adopters of devices with onboard cellular modules will be forced to replace the entire unit, whereas modular systems are retrofitted at the component level.

The savvy, proactive dealer will anticipate the inevitable and take immediate measures to ensure the transition will be as painless and inexpensive as possible. The most important thing you can do is provide new customers with equipment that will require no updating in advance of the 2G sunset, such as Telguard’s 3G-enabled alarm communications solutions. Make 3G installations standard right now, and before 2G disappears for good you’ll need to update only those pre-2012 installations not already eliminated by churn and attrition.

2G is going away, and the sooner you transition to 3G, the safer your RMR — and your business — will be. For more information about this subject, visit www.2GSunset.com.

 

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