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Summary:

AT&T is asking its mobile customers with 2G-only phones to make the leap to 3G devices, warning them in a letter that their voice and 2G data quality may soon degrade. It looks like AT&T is following T-Mobile, replacing its GSM networks with new HSPA capacity.

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Updated. AT&T is asking its mobile customers with 2G-only phones to make the leap to 3G and 4G devices, warning them in a letter that their voice and 2G data quality may soon degrade in some areas, MarketWatch reported Thursday. It looks like in the aftermath of its failed merger with T-Mobile, AT&T is following its would-be acquisition’s lead, shutting down its older, inefficient GSM networks to clear room for newer, faster HSPA services.

1st Update. An AT&T spokesperson told us that the letters are going out only to customers in New York and only a small group of them at that. Whatever AT&T’s plans are for its nationwide 2G network, it’s starting off conservatively. The spokesman also said it is offering each of those customers a free 3G device, so AT&T appears to being taking the carrot, rather than the stick, approach to migrating its customers away from 2G-only phones.

2nd Update. A quick search of the AT&T retail site revealed that the carrier is still selling 2G-only devices, the Samsung a777 and the AT&T Z221. Both are among the most budget of the budget category in its GoPhone prepaid line, and the vast majority of its prepaid — and all of its postpaid — phones are 3G. But generally it’s bad form to tell one customer his 2G service is going to degrade while trying to sell a different customer a 2G-only device.

If AT&T is shutting down a significant portion of 2G networks, it may have found an answer to its capacity problems – at least in part. If it can’t buy new 4G airwaves, then it can cannibalize its older networks, harvesting their valuable frequencies for new HSPA and LTE capacity. That’s exactly the approach T-Mobile plans to take to get to LTE. When all is said and done, T-Mobile will have a sliver of GSM network remaining, but it will have an even bigger HSPA+ than it runs today, as well as an LTE network on par with AT&T’s and Sprint’s’.

This isn’t an entirely new initiative for AT&T. After launching its initial HSPA networks over unencumbered PCS spectrum, it started replacing GSM capacity in the cellular bands with HSPA+ carriers in an effort to feed the iPhone’s insatiable hunger for data. At the time, though, AT&T had plenty of headroom. HSPA is known for being a mobile broadband technology, but it also supports circuit-switched voice calls much more efficiently than GSM (CDMA’s 3G equivalent EV-DO doesn’t support voice at all). When AT&T began harvesting cellular frequencies in 2009, much of its voice traffic and a large portion of its data traffic had already moved to HSPA, leaving it with a big and underutilized 2G network.

With these letters, though, AT&T is hinting it wants to accelerate that spectrum re-farming process rather than simply clear its GSM networks through natural attrition. If it can convince more 2G-only customers – either through the carrot of a promised upgrade or the threat of a loss of service – to move to 3G devices, it can move aggressively to add much-needed mobile data capacity.

Solving AT&T’s near-term capacity crunch

Will this solve AT&T’s so-called spectrum crisis? I assure you AT&T will claim it won’t, and I would agree with them in part. If the mobile industry is really going to offer huge buckets of broadband at much cheaper prices, it will need to take a multifaceted approach to adding capacity. It will have to build denser networks with Wi-Fi and small cells and take advantage of more spectrally efficient wireless technologies such as LTE and LTE-Advanced. But carriers will also need to bulk up on spectrum, even beyond the licenses they already hold in reserve. Sorry, but if you dream of one day having a consistent 50 Mbps mobile connection to your smartphone or tablet or a 100 GB monthly data plan that doesn’t equal a mortgage payment, then the simple fact is that AT&T and everyone else are going to need more airwaves.

But what re-farming will do is give AT&T a lot more breathing room as its HSPA networks become overloaded with iPhone and Android traffic. AT&T won’t shut down its GSM networks entirely. There will be many customers that will refuse to move to 3G – that is, unless AT&T starts handing out free devices with no contract stipulations. It will also need to maintain significant GSM capacity for its machine-to-machine (M2M) connected-device services, a business that AT&T is aggressively growing and that is still dependent on ultra-cheap GSM M2M modules.

There may also be big regulatory hurdles to AT&T shutting down too much of its GSM capacity. A lot of small regional GSM operators – as well as big international carriers – depend on AT&T’s GSM networks for roaming. If AT&T’s 2G networks go offline, those operators’ nationwide footprints suddenly get a lot smaller. The Federal Communications Commission might not take too kindly to such a sudden blow to smaller operators.

Eventually, though, AT&T will be in a position to turn those decade-old networks off completely, just as it shut down the last of its TDMA networks in 2008. Two years before TDMA went dim, AT&T (then Cingular) began charging a $5-a-month fee to any customer that refused to upgrade to a GSM phone. It may not be too long before we see AT&T foist a similar fee on its GSM-only customers. That would surely result in a lot of outrage from customers and public interest groups, but ultimately the industry and consumers would benefit. If the mobile broadband revolution is to move forward, then we need to start sacrificing our older networks.

  1. This will be unwelcome news for AT&T prepaid GoPhone customers, especially those that rollover substantial dollar amounts.

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    1. Kevin Fitchard Friday, March 2, 2012

      Hi Yacko,

      I would have figured all of AT&T’s phones would be 3G-capable by now, but after reading your comment I did a quick search of the site. Lo and behold, two prepaid phones are 2G-only. Not exactly good the best public relations move there. I updated the story.

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      1. There are many still using older 2g phones they purchased as part of starting GoPhone package. These phones still work fine. In my case, it is a cheap backup cellphone for $100 a year. Is AT&T buying these customers a new 3g cellphone and rolling the account into the new circumstances to make it as painless as possible?

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  2. Actually, the a777 is a 3G device. I have no idea why it isn’t listed that way.

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  3. Both the Samsung a777 and the AT&T Z221 are 3G!

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    1. Kevin Fitchard Saturday, March 3, 2012

      Hi Marion, Elite,

      Both are listed as only having GSM and EDGE radios in their device specs. And neither has a 3G tag on the GoPhone page while all other devices do.

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      1. Rick Fernandez Monday, March 5, 2012

        Some google research shows the A777 to be WCDMA capable..because it is regardless of how AT&T lists it. I just looked at the detailed specs on AT&T’s website and it shows it to support 3G.

        The ZTE 221 is also 3G. If look at the photograph of it, it shows “3G” on the display. Also if you look it up on the manufacturer’s website (www.zteusa.com) they list it as a 3G device.

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  4. there are still a lot of 2G iPhones out there…and the EDGE speeds are actually quite respectable these days with Ericcsons boosting technology ATT applied…

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  5. They are complete idiots for doing this. Soon the 3G network will be closed down as well. You see AT&T LTE radios on Android phones can’t be degraded to lower signals meaning they are always “on” and can eat up data quickly on their now throttled data caps. This is ridiculous. Iphone 4S just introduced the ability to toggle to 3G network from HSPA since users were complaining about high data usage from Siri. But if a 3G network doesn’t exist and all there is LTE, very people will be using AT&T’s network for data.

    Its bad for data heavy smartphone users and business owners who use data heavily for their livelihood. AT&T already lost millions from the failed T-Mobile deal. Lets see how many people leave for competitors and dig AT&T an even bigger hole than what they’re currently dealing with.

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    1. Kevin Fitchard Saturday, March 3, 2012

      Hi Fa,

      AT&T’s HSPA networks are going to be around for a very long time. It’s GSM networks aren’t going anywhere either. They’re just going to get smaller.

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    2. Cite your sources or think about your comments before posting. You know not what you speak.

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  6. Mike BadLeroy Brown Saturday, March 3, 2012

    I think they’ve already started this in my area, though I never got a straight answer. 3 years ago, I got myself and my mother each a Blackberry 8520 (2G + WiFi). After about 16 months of ysing the phones with minimal problems, all of a sudden I couldn’t send any MMS messages, SMS and voice service was spotty and low-quality, and my carrier internet didn’t work. Lo and behold, when my mother came to my house, her phone acted the same way, but at her house all the features worked. After countless hours on the phone with ATT customer reps and in the store (wiping the phone repeatedly, etc.), I screamed loud enough that they gave both of us a 9300 (3G) phone and all has been well since. It was obvious that the 2G service in my area was to blame, because I tried my SIM (and 2 replacements they gave me) in several older phones (RAZR, etc) and had little to no service, but putting it in a 3G phone worked flawlessly. No one at ATT ever admitted that 2G was being phased out here, but I can’t see any other explanation.

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  7. Yay, this 2G network they are trying to phase out… Isn’t this the same network that those with unlimited data plans are supposed to be tossed onto whenever the reach their BS data limit??

    Yay, one day the they say those with unlimited data plans will be throttled down to 2G/Edge once they reach a BS limit on their unlimited plans….. Just to announce a few days later they are minimizing that same 2G sectrum as they slowly phase it out….

    o_O?

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    1. Kevin Fitchard Sunday, March 4, 2012

      Hi msgnyc,

      I see how it would be easy to get that impression, but throttling doesn’t knock you down to the 2G network. It squeezes the HSPA pipe so you can only access GPRS/EDGE speeds, but it’s still over the 3G/4G network.

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  8. William Diaz ✔ Sunday, March 4, 2012

    Its AT&T’s way of continuing to nickel and dimeing its customers once again, cause it didnt get its way.

    To be blunt, AT&T should be broken up once again, and sold off to the smaller guys at a large discount. Verizon shouldnt be allowed to buy them, CenturyLink shouldnt either. Leave it to Sprint, T-Mobile, MetroPCS, Leap Wireless, etc…

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    1. Kevin Fitchard Sunday, March 4, 2012

      Hi William,

      I understand your sentiment, but I really view this as a positive. The more efficient networks that AT&T builds the more it can drop mobile data pricing. Of course, this doesn’t mean it will automatically cut rates, but it will have much more competitive incentive to do so than if it kept those GSM networks running.

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  9. I think this is a great idea. HSPA+/LTE are much more efficient, supporting more users/data on the same spectrum. Sorry Grandma, time to move to 2012 and dump that Nokia 8290.

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    1. I live on the country and I can use edge fine but 3G doesn’t work out here. What will I do?

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