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AT&T will shutter its 2G network by 2017

Move will help free 1900 MHz PCS spectrum for advanced services
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AT&T Mobility (NYSE:T) plans to shut down its 2G network by 2017 as it refarms that spectrum and deploys more advanced services.

The carrier, which is currently refarming its 1900 MHz PCS spectrum in New York City so that it can replace the GSM service with HSPA+ and LTE, disclosed the date of its 2G shutdown in a filing Friday with the Securities and Exchange Commission.

"We will manage this process consistent with previous network upgrades and will transition customers on a market-by-market basis" from GSM and EDGE networks to more advanced services, the carrier said.  "We expect to fully discontinue service on our 2G networks by approximately January 1, 2017. Throughout this multi-year upgrade process, we will work proactively with our customers to manage the process of moving to 3G and 4G devices, which will help minimize customer churn."

As of June 30, 12 percent of AT&T's postpaid customers were using 2G devices, a figure that's likely to diminish in the years ahead. AT&T spokesman Mark Siegel declined to comment on how many customers that translates to.

"We do not expect this transition to have a material impact on our operating results, but will continue to evaluate the financial impact of transitioning customers from 2G devices to 3G or 4G devices," AT&T said.

The shutdown of AT&T's legacy 2G network is in keeping with other carriers' efforts to supplant older networks with newer, more advanced services. Sprint Nextel (NYSE:S) is shutting down its 2G iDEN network by the middle of 2013, and plans to refarm its 800 MHz iDEN spectrum for CDMA voice and LTE service. In addition, a key part of T-Mobile USA's network modernization plan is to refarm a portion of its 1900 MHZ PCS spectrum for HSPA+ services so that it can transition to using all of its 1700 MHz AWS spectrum for LTE. However, T-Mobile has maintained that it will continue to offer 2G services to existing customers, many of which are M2M users.

By shutting down 2G service, AT&T will be able to free spectrum for extra network capacity. The issue was highlighted with AT&T's recent announcement to buy NextWave Wireless and its 2.3 GHz WCS spectrum in a deal valued at $600 million.

For more:
- see this SEC filing
- see this WSJ article (sub. req.)
- see this AP article

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