CCA: Shutdown of 2G networks 'an issue of concern' for smaller carriers

AT&T is migrating customers off of its 2G network before shutting those towers down at the end of the year, and Verizon has said it will sunset its CDMA 1X network by the end of 2019.

Those moves have drawn the attention of some smaller carriers who depend on the older networks to provide roaming services to their customers.

“It’s certainly an issue of concern to a lot of the small carriers that service the most rural areas, where getting a signal – any signal – is a challenge,” said Steve Berry, CEO of the Competitive Carriers Association. “This means that as a wireless carrier you’re going to need to figure out how you’re going to operate your network, and also have partnering arrangements” to provide service to customers roaming outside a carrier’s coverage area.

CCA, which holds its annual convention in Seattle next week, was founded in 1992 by nine rural and regional mobile operators, and it now claims nearly 100 carrier members. While the bulk of its membership is still smaller operators, its roster also includes T-Mobile and Sprint.

In 2012, in fact, the association – which previously was an advocate for operators with fewer than 10 million customers -- changed its bylaws to support carriers with fewer than 80 million subscribers. Verizon and AT&T are the only U.S. operators that count more than 80 million customers.

AT&T CFO John Stephens this week noted the inefficiencies of 2G compared to newer technologies, drawing a correlation between the carrier’s shrinking 2G customer base and increasing margins from wireless services.

Verizon, meanwhile, noted the ever-increasing number of customers accessing LTE.

“That’s important and critical to how we will approach collaborating with our roaming partners and customers,” Verizon spokesman Howard Waterman said via email of the 2G shutdown. “Remember, this is more than three years away. The vast majority of customer use is on our 4G LTE network already, and that usage is growing daily.”

But 2G is still important to many rural users, Berry argued. And regional network operators often provide better coverage in some remote areas, which creates something of a symbiotic relationship between nationwide operators and their much smaller counterparts. Those relationships may become even more important as nationwide operators shut down their 3G networks a few years later.

“What we’ve seen in most rural areas, or areas where it’s difficult to build and maintain networks, the largest carriers have historically not built those out very vigilantly,” Berry said “It’s been the smaller carriers that have built out those areas…. It’s been our hope that the larger carriers will see some value” in leveraging those local networks.

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