According to many records, the term the ‘Internet of Things’ (IoT) was first brought about by Kevin Ashton in a presentation to Procter & Gamble (P&G) in 1999, but the practice of sending data between objects and people dates much further back to the days of the electrical telegraph in the 1940s.
Nowadays we enjoy the benefits of IoT-connected devices in almost all walks of life. From wearable devices, like Fitbits, that track your heart rate, blood pressure, and other health markers, to sensors installed in manufacturing equipment that can monitor the performance of each machine, IoT has a place in almost every room of the home, workplace, and public spaces.
However, many of the devices that are out in the field today are under threat of losing connection due to network closures. IoT sends data in real-time between people and objects via a connection to either a data network or Wi-Fi. Lots of IoT devices currently in use connect to a 2G or 3G network via SIMs installed in a component that’s welded into the device at the point of manufacture.
The component that supports a 2G or 3G SIM is entirely different from the technology that supports a 4G SIM, which means to switch networks, you need to buy a totally new piece of equipment. On the face of it, this shouldn’t pose a problem to the industry, but, since the announcement from EE that it would be shutting down its 2G network by 31 December 2025 (disclosed in documents available to GMSA members) and Vodafone’s statement that its 2G network would be available in the UK ‘until 2025’, many devices are now at risk of losing connection in the next five years.
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The 2G 3G situation in 2021
This isn’t where the issues stop as it’s not just existing devices that are a problem. Buyers and sellers are now unsure which technology to invest in for the future, creating a standstill in the market. So, why the stalemate and why aren’t companies investing in the new 4G equipment?
Let’s start with costs. 4G technology can be up to three times more expensive than 2G technology, so the market is caught in uncertainty. Do they risk the cheaper 2G technology that might have a shorter lifespan, or do they take a leap of faith and purchase the more expensive technology, even though 2G networks might actually be around for many more years? This ambiguity has driven the IoT market to near halt and a solution is needed in 2022 if we are to move forwards.
Prediction for the IoT Market in 2022
At OV, we believe that the market will be trading with confidence again in 2022 for three reasons: multi-network providers, eSIMs, and iSIMs.
Firstly, in the short term, we predict that multi-network SIMs will resolve the hesitancy in the market in 2022. Multi-network providers work differently to single MNOs because they partner with multiple providers, so when one network closes, they can simply move the SIMs connection to another network in the area – up until no other network exists. This means that if you choose a multi-network SIM when buying 2G or 3G equipment, you can be sure you’ll have a connection for as long as it exists in the location of the device.
We hope that this knowledge will help assure the market to trade without hesitancy in 2022. Those purchasing 2G and 3G equipment understand that it will eventually be unusable, but knowing a connection will exist for as long as possible means that existing equipment can be replaced and upgraded within its natural life cycle.
Looking beyond 2022, we believe that eSIMs and iSIMs will be the long-term solution to network closures. An eSIM is installed into a device and connects to any operator (without the need to swap SIMs), and an iSIM is software soldered into the equipment – moving the industry away from the reliance on components. Both of these solutions remove the reliance on plastic SIM cards and single operators.
Although we cannot predict when 2G and 3G networks will close for good, the multi-network SIM, eSIM, and iSIM give us the confidence that the market will be trading as it should be in 2022.