Convergencia Research, Consultoría especializada en Latinoamérica y Caribe
Tuesday, March 21, 2023

Latin America, slowly switching 2G and 3G networks off

Last February, Claro was shutting down its 2G network in Colombia, following in Tigo's footsteps. In Chile, Movistar plans to do the same in the second half of this year, while Telecom will shut down 3G in Argentina. The massification of 4G and the entry of 5G are beginning to influence these decisions.

The massification of 4G and the deployment of 5G have accelerated the refarming of spectrum assigned to 2G and 3G and the shutdown of these services in Latin America. In February 2023, Claro was completing the shutdown of its 2G network in Colombia, following in the footsteps of Tigo, which did so last November. These are the latest cases of a process that had few precedents in the region but that has announcements of continuity this year.

Despite the passing of time since the implementation of 2G in the early 90s and 3G some 10 years later, both services still have a good number of subscribers in the region.

GSMA noted in its report "The Mobile Economy of Latin America" (end of 2021 data), that in the six largest economies in the region, there was a disparity in the percentage of 2G and 3G subscriptions. Brazil and Chile had the lowest levels, with 16% and 23%, respectively; Argentina was at an intermediate level, with 38%; and Peru, Colombia, and Mexico had the highest levels, with 50%, 51% and 57%, respectively.

According to GSA, which groups mobile providers, Latin America showed the lowest level of 2G and 3G service switch-off announcements in the world, with only 1% of the total number counted in its report "2G and 3G Switch-Off", dated July 2022. The entity considered that the adoption of 4G and 5G would advance the 2G and 3G shutdown, but drew attention to the fact that only in one Latin American country, Colombia, there were concrete plans to switch off these networks. In the rest of the markets, authorities and operators were weighing opportunities and costs, except in Mexico, where AT&T and Movistar shut down those services between 2019 and 2021.

Reasons. In Argentina, Telecom plans to shut down its 3G network by the end of 2023 and leave 2G in operation. The decision was influenced by the high adoption of VoLTE in Personal's network. VoLTE allows for greater efficiency of spectrum use as it triples the coverage capacity of 2G and doubles that of 3G, as Telecom CEO Roberto Nobile justified at the Global Mobile Broadband Forum, organized by Huawei in Bangkok, Thailand, at the end of 2022. In June 2021, Personal had 22% of its voice services on VoLTE, and that level rose to 62% by the end of October 2022.

Telecom's spectrum dedicated to 3G will be used to strengthen 4G service. Telecom has spectrum for 2G and 3G in the 824-849 MHz and 869-894 MHz bands and in the 1,850-1910 MHz and 1930-1990 MHz bands.

In Brazil, 4G deployment was deep and already contains 80% of subscriptions while 5G is growing rapidly and is estimated to already have about 10 million subscriptions. But 3G is sustained with more than 27 million subscriptions and a presence in the three leading operators: TIM, Vivo and Claro.

There, Vivo has already begun the gradual disconnection of its 2G network since 2022, albeit in slow steps. According to Vivo's CEO, Christian Gebara, the operator aims to complete the switch-off "in the medium term", which would give the company "a lot of cost efficiency" and the release of more spectrum for more efficient technologies through the refarming of the 1,800 MHz band.

In Bolivia, the operator Entel started in mid-2021 a plan to replace its 2G service in rural areas with 4G and LTE. The program, still underway, aims to modernize radio bases located in rural areas to reach 1,348 rural localities with more than 752,000 people in different areas of the country.

Telefónica. Telefónica Hispanoamérica, on its part, has a plan towards 2024 that gives way to the progressive renewal of the 2G service towards higher-level networks, such as 4G and 5G, company sources told Convergencia. They recalled that they shut down 2G services in Mexico in 2019 to move to more advanced technologies and that in Chile they will do the same this year. When asked Telefónica de Chile about its plans for 2G and 3G, sources assured that the operator is carrying out the progressive renewal of the 2G service towards higher-level networks, 4G and 5G. They also noted that in order to carry out this technological migration they are taking initiatives, contacting their customers, both individuals and companies, to support them in the technological migration from 2G. Movistar's 2G network in Chile has been gradually reduced in capacity for 4G and/or 5G, whose adoption has been almost twice as fast as that of 4G due to prices and the wide range of devices available in the market.

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