3G Wireless Shutdown Will Hurt AT&T, Verizon, T-Mobile: Jeff Kagan

Jeff Kagan  |

Image source: Saurabhkumar Singh / Pixabay

AT&T recently filed a response to the security and alarm companies' complaint that shutting down their 3G network at this time will have a negative impact on their industry. AT&T said this complaint is unwarranted and also said that it needs to shutdown 3G to help 5G grow. That’s only one side of the argument, however, and most users, investors and companies do not understand the ramifications. In fact, AT&T does not seem to understand how this shutdown will hurt them as well.

First, it’s true that all three major, national wireless networks — Verizon Wireless, T-Mobile US and AT&T Mobility — will eventually shut down their 3G networks. This is the way the industry has always moved forward.

Verizon, T-Mobile, AT&T will eventually shut down their 3G networks

Traditionally, there are three generations of wireless technology operating at any stage that move like a wave through time.

The three generations act like this… first, there is the newest generation, 5G in the current case, which is now being installed. Then, there is the last generation, 4G, which is already installed. And finally, there is the previous generation, 3G, which serves several different groups.

You see, there are still plenty of rural areas and outlying areas which rely on 3G. There are also older phones which still use 3G. And finally, there are other industries that use 3G in their products and services.

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All three of these will be negatively impacted when the major carriers prematurely shut down 3G.

Shutting down an older wireless technology does not impact the majority of users, but it will have significant impact on plenty of users with older phones or those in more rural areas.

Additinally, it can also negatively impact industries that still use the older technology. e.g., the automotive industry with services like OnStar, and security and alarm companies.

Prematurely shutting down 3G will have negative impacts on marketplace

This time around, wireless networks want to turn off their 3G network, leaving only 4G and 5G. Is that sufficient? This is the first time in today’s wireless world when we will only have two generations.

Plus, this time around the question of when to shut down 3G also impacts other industries and countless American users.

Let’s remember the negative impact of the time we shut down the 2G wireless networks. At that time there were not many other companies and industries using 2G. Today there are plenty using 3G and will all be hurt.

How the shut down of 3G networks will negatively impact other industries

One example is the automotive industry. Car makers like Cadillac, Lexus, Mercedes-Benz, BMW, Acura, Infinity and others use wireless technology to operate many safety and security features.

OnStar is a good example. OnStar is the wireless system that many carmakers use as a service they sell to customers. It is used to locate vehicles, send help, give directions and much more. It’s a security blanket for drivers.

Several years ago, when we upgraded the wireless networks to 4G, and we turned off 2G, this basically shut down this feature on countless cars nationwide. You see, a decade ago 2G was the network that OnStar and others used.

2G network shutdown negatively impacted other industries

This impacted not only the automotive industry, but also all the drivers nationwide who depended on this feature. That’s because these features used the 2G network. When shut down, these features simply stopped working.

It took years for the automotive industry and their users to recover from this disaster. This is the kind of disaster we want to prevent from happening again.

Unfortunately, this is the same kind of train wreck we are heading for when we shut down 3G.

The automotive industry didn’t work with the wireless industry closely enough to design a plug-in solution to upgrade to the next generation.

That’s why shutting down the 3G networks will negatively impact the automobile industry once again.

The same problem is now being faced by the security and alarm industry. These companies use 3G, and when that network is turned off, their security services will no longer work.

Wireless industry becoming crucial link in chain for many industries

The wireless industry is becoming a crucial link in the chain. If the wireless industry cannot build the kinds of bridges to keep other industries and their users protected during transitions, then the government will have to step in and make sure it happens.

I would think the wireless industry would prefer that the government not get involved. That would certainly be my preference. For that to happen, however, that would mean that the industry must play fair and take care of its customers whether they be busineses, entire industries or individual users.

Verizon, T-Mobile, AT&T heading down self-destructive path

Unfortunately, that is not happening yet. The wireless carriers are heading down this same, self-destructive path.

Eventually, 3G will shut down, of course. We all understand this, but industries like automotive, security and alarm will be left out in the cold, again, unless they have a solution.

Fortunately, security users can spend money to upgrade their systems. The problem, the providers say, is their customers have not been buying the upgrade because of COVID-19.

The automotive industry should have learned a lesson from the painful past and come up with a way for a quick and easy upgrade from 3G. It hasn't.

Now the auto industry and its growing number of users who depend on these services may very likely be left out in the cold once again.

Once again, the change will eventually happen. The only question is when.

Early 3G shutdown will give wireless carriers a black eye

So, the real complaint comes not only from the security and alarm industry, but from the automotive industry, again, and from every other industry that uses these wireless services.

This is the real problem that an early shutdown of 3G will create among Americans, industries and more.

This will give the wireless industry a black eye with the public, investors and others. And this is something that can be avoided by working together and not battling it out.

The wireless industry used to be able to make these changes whenever it wanted because those actions didn’t impact other industries.

Today, however, industries are heavily reliant on wireless technology and countless users will be left stranded.

Wireless CEOs need to tread carefully with 3G shutdown

The CEOs of wireless carriers like AT&T, Verizon and T-Mobile have much to consider before they pull the plug and negatively impact users and other industries.

If they want to continue to show growth going forward, they must not hurt their users and customers. They must concern themselves with all the people and all the industries with whom they work.

Hopefully wireless will not shoot itself in the foot shutting down 3G

If not, then these industries and these users will not trust the wireless industry going forward. And that would be a disaster for them and the entire wireless industry going forward.

That is not what the wireless industry wants. It also doesn’t want the government to step in and regulate from afar.

 So, I hope every wireless CEO finally wakes up to this important issue and handles it correctly.

They are not alone any longer. They are now part of a larger team of companies, industries and users. They must be concerned with other team members, not only themselves.

If not, then the wireless industry risks paying a very heavy price going forward.

 

Jeff Kagan is an Equities News columnist. Kagan is a Wireless Analyst, Technology Analyst and Commentator who follows Telecom, Pay TV, Cloud, AI, IoT, Tele Health, Healthcare, Automotive, Self-Driving cars and more. Email him at jeff@jeffKAGAN.com. His web site is www.jeffKAGAN.com. Follow him on Twitter @jeffkagan and LinkedIn www.linkedin.com/in/jeff-kagan/.

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Equities News Columnist: Jeff Kagan

Source: Equities News

DISCLOSURE: The views and opinions expressed in this article are those of the authors, and do not necessarily represent the views of equities.com. Readers should not consider statements made by the author as formal recommendations and should consult their financial advisor before making any investment decisions. To read our full disclosure, please go to: http://www.equities.com/disclaimer.

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