Sierra: 2G M2M sales for long-term apps in the U.S. are over
BARCELONA, Spain--M2M modem maker Sierra Wireless said it no longer is selling 2G modems in the U.S. market for long-term M2M applications. The company said that since major U.S. wireless carriers like AT&T Mobility (NYSE:T) and Verizon Wireless (NYSE:VZ) are planning to turn off their 2G networks sometime in the next 10 years, most M2M companies planning long-term deployments are opting for LTE network connections to ensure those connections will continue to work in the next decade.
"There is no more 2G [sales] in the U.S.," said Olivier Pauzet, VP of marketing and market strategy at Sierra Wireless. Sierra clarified that the company continues to sell 2G services for M2M in the U.S. market, and that Pauzet's comments were focused on long-term M2M deployments that must last 10 years or more.
Pauzet said Sierra has sold more than two million LTE modems during the past two years in the U.S. market.
Pauzet explained that most of the companies deploying machine-to-machine services want to make sure their applications will be able to work for the next 7-10 years. AT&T has said it will turn off its 2G network by 2017, and Verizon has said it will sunset its 2G and 3G CDMA networks by 2021. As a result, Pauzet said, most of the companies looking to deploy M2M services are opting for LTE modems in order to ensure their services will continue to work past 2021. Pauzet said 2G M2M modems continue to sell in other parts of the world where wireless carriers have committed to maintaining their 2G networks.
AT&T and Verizon plan to shutter their respective 2G networks in order to refarm their 2G spectrum for LTE. Both carriers have complained that they do not have enough spectrum to meet customer demands.
Sierra Wireless in January announced it would sell its AirCard unit to NetGear for $144.5 million. Pauzet explained Sierra needed to offload the business unit because it did not have the financial resources to invest in both AirCard-branded portable hotspots (which are becoming increasingly sophisticated, with touchscreens and other functions) as well as its M2M business. However, Pauzet said Sierra plans to keep its modem business, which involves building cellular modems for insertion into laptops, tablets and M2M products. He said Sierra's modem business is a critical element of its wider M2M strategy.
Article updated March 4 to clarify that Sierra is no longer selling 2G products for long-term applications but continues to offer 2G products for those customers that want them.