Recent Reports Show That 46 Percent of Global Mobile Users Use 2G and 3G

Last week, Strategy Analytics published an interesting article. The article is based on Strategy Analytics’ report about low-cost 4G mobiles. This report was combined with the recent industry developments, 4G user migration opportunities, and the ongoing 2G and 3G dropout trend analysis. The Strategy Analytics’ report about low-cost 4G smartphones discusses the market dynamics as well as opportunities.

Strategy Analytics announced the latest wireless market forecast earlier this year according to this report, 46% of the total number of phone users use 2G or 3G mobiles. This means that approximately half of the global mobile users are using 2G or 3G devices. However, only 27% of the total worldwide mobile revenue is generated by 2G and 3G smartphones.

According to Strategy Analytics’ wireless market forecast, 2G and 3G smartphone users will only contribute 10% of the total global mobile revenue by the end of the year 2023. The report also suggests that Africa is a special case and it still uses 2G. The average revenue per user (ARPU) of each country in Africa is less than $2. This indicates that the subsidy to encourage user migration to 3G or 4G has limited operational space.

However, Africa and various other developing regions have displayed better progress in encouraging 4G services and 4G devices. For instance, Airtel in Africa has expanded 4G network in the region and have introduced ‘large packages’ in the region. This has ultimately helped to promote users to migrate to 4G services.

The average data usage, as well as data ARPU (average revenue per user) values, have been greatly improved, according to the Strategy Analytics report. ¾ of the revenue growth during the last year was due to data usage. In last year, the proportion of 4G data users was 18%. This number increased to 29% in March of this year.

More than 60% of the total data revenue generated by Airtel came from 4G data revenue. Several operators are switching to 4G and have already announced plans to de-network 2G and 3G. Various countries in Asia- Pacific region and North America are at the forefront of the worldwide 2G and 3G de-networking processes, and other countries are currently working to promote users’ migration to 4G. For instance, the Indian market is accelerating to 4G services and India’s Airtel has already closed the 3G networks in various phases.

In the Netherlands, FoneZiggo closed its 3G network during February of this year. TT-Netvaerket which is the Telia and Telenor’s Danish joint venture plans to close its 3G network in April of next year. CTO of Vodafone also announced to close 3G Europe by the year 2022. Vodafone’s CTO talked about this during a Vodafone business analyst meeting which was held recently.

According to Strategy Analytics, the withdrawal of the 2G network needs a long time for preparation, particularly the migration of 2G IoT (Internet of Things) services. Operators usually have to focus on closing the 2G mobile business, and they have to reserve a 2G thin network to provide 2G services for existing 2G users.

Operators also need to focus on the importance of the 2G USSD (Unstructured Supplementary Service Data) feature for smartphone payment services in Africa. This function is a crucial source of income for various operators in Africa.

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