Who is afraid of 3G phaseout?

As part of their efforts to protect assets and ensure safety, trucking companies use the latest technology, as insurtech startups, insurance carriers and industry experts say. Much of this technology, such as GPS speed monitoring of drivers, relies on cellular networks. In some areas, mobile communication networks are also used in stationary technologies such as sensors for home security and damage caused by objects.

So what happens to this complex security technology as the march forward upgrades networks from 3G to 4G to 5G? The advancements of each generation of mobile networks eventually leave the old technology in the dust. By 2022, the major mobile carriers, one by one, they have shut down their 3G network – AT&T in February, T-Mobile in March, and the former Sprint network that is now owned by T-Mobile in June. On December 31st, Verizon plans to shut down its 3G network.

John Canali, senior analyst, Omdia

“Consumers may not know much about sunsets online,” said John Canali, chief analyst at Omdia. “The renewal of a cell phone is two or two and a half years. Most people don’t really need to think about building a legacy technology, like they have a connected car, that could be on the road. 10 or 15 years. Or insurance clay [a telematics tracking device for auto insurers] who may think they are connected via Bluetooth.”

Although many of the affected technologies have found ways to increase and prevent their potential from dying, there are gaps and gaps. In the automotive industry, as older vehicles are retired and new ones enter service, mobile technology upgrades come with new devices, says Michele Pelino, senior analyst at Forrester Research. The telematics monitoring equipment for passenger cars is easy to upgrade because they are not attached to the vehicle bodies, he adds.

However, other technologies for passenger cars that use mobile communications may not be as cost-effective. Bill Menezes, a Gartner analyst, says that the Nissan Leaf cars had 3G capabilities that could not be replaced, and its Internet connection served as the Internet of Things that insurance companies could use to monitor driving distance and collisions.

Bill Menezes, principal consultant, Gartner

“Then it won’t work after the shutdown,” he says. “You may need to find another part that can be installed as a connectivity option that includes 4G connectivity, or do without until the customer is upgraded to a future vehicle that has 4G connectivity.”

This can be expensive and labor intensive for just one vehicle, Menezes observes, but for fleets with many or hundreds of vehicles (especially freighters), “it’s suddenly a big job,” he says. However, many providers that rely on mobile connectivity had a long lead time, knowing that 3G “will be the end of life at some point even if it doesn’t have a date,” adds Menezes.

Similarly, for applications such as home security where sensors and systems can use mobile technology to communicate, a service provider must upgrade its equipment, Pelino notes. However, this may not be completely foolproof for reasons that the security provider cannot solve.

“ADT used wireless more for security applications, rather than worry about land lines being cut,” Menezes recalls. “They were rushing to the end to make a lot of changes because customers didn’t respond or couldn’t get their hands on the hardware to make changes.”

ADT changed its 3G technology to LTE, which is between 3G and 4G and not as high as 4G. Meanwhile, according to Steven Lawson, senior director of programs for 3G services at ADT, the company has “changed almost all of the behavior of customers who use 3G / CDMA radios,” he said in a written statement. ADT offered two different ways to configure its systems and connect them to the monitoring center. First, a manual update in the form of a CellBridge device for LTE switching, or second, a technical update by an ADT specialist, according to Lawson.

However, according to Omdia Channel, LTE modems and data usage rates are expensive. “Insurers who want to differentiate their insurance offerings based on product, rather than price, can tie a dongle with LTE connectivity to a wi-fi hotspot,” he says.

Of all the technology services already mentioned, the one that has the biggest problem due to the 3G phaseout may be direct communication with law enforcement through smartphone applications, especially for older customers.

Michele Pelino, senior analyst at Forrester Research

Michele Pelino, senior analyst at Forrester Research

“Retirees who don’t really pay attention to this will not replace their phones in 12 to 18 months,” says Pelino. “The system we use is usually very fast. There aren’t many 3G phones out there, but the ones that will be out there will affect certain segments of the population.”

In response, John Hancock Life Insurance said the end of 3G does not affect its communication with senior policyholders. “We have several ways for customers to access information and complete transactions, primarily through our online support center,” the company said. “We also know that around 25% of our callers, probably representing the older population, still use landlines and will therefore not be affected by the end of 3G.”

The 3G phaseout is still hitting hard for public safety, however, medical alert devices and fire alarms may also rely on 3G connectivity, according to Tammy Parker, senior analyst for global telecom consumer services at GlobalData. For example, Teller County, Colorado, which has a population of over 24,000, has to face difficulties is an emergency service due to the outage and has been lobbying Verizon for a solution.

Another wrinkle in the 3G phaseout for any type of electronic devices project, whether medical devices, home security systems or anything with its hardware, is that they cannot be direct buyers of 3G through the carrier – just use the network, records. Titus M, senior analyst at Everest Group. “Telecom providers have simply said, this is not a direct 3G customer so it doesn’t fall under their purview,” he says. “For these alarm systems, there are at least 10 million customers who are still on standard 3G and other emergency or elderly services. They are also still on 3G and the implementation has been very slow.”