There are clear signs it is the beginning of the endgame for the GSM standard’s 25 years of mobile market leadership, with mobile operators announcing the planned shutdown of GSM networks on almost a weekly basis. That is a very long life cycle for a technology, reflecting its durability and many accomplishments. Launched commercially in Finland in 1991, GSM fought off both competing TDMA standards like PDC, iDen and D-AMPS and its major rival, CDMA, to become the world’s dominant mobile communications technology. It achieved enormous economies of scale, connected both developed and less developed countries, and brought users of all income levels into the same network on a global scale.
But while the life and achievements of GSM should be celebrated, so too should its passing be welcomed. As consumer demand moves from voice to data, and voice itself becomes data, the central issue is the cost-per-bit to serve the data-hungry customer. That cost-per-bit is decreased by deploying state-of-the-art technologies, and the only realistic GSM-scale option today is 4G LTE. Maintaining less-efficient 2G and 3G networks only increases the cost of serving data demand, which is particularly problematic when it comes to facilitating access to data by low-income customers.
The belief in many quarters that the poor don’t have an interest in data is a fallacy. I have tested this assumption and found the poor want video more than anybody else. Even the illiterate can enjoy video. Digital literacy can come even in the absence of conventional literacy. Video services entertain and educate. But video requires data-capable mobile broadband networks, and providing affordable data to a mass audience means deploying the most advanced networks.
This is why widespread LTE deployment should be the central priority for the mobile industry. On the one hand, mobile is losing leadership in connecting the unconnected, at least at the strategic marketing level, as Google, Facebook and Microsoft promote broadband delivery via their proprietary sub-optimal solutions involving drones, balloons and TV white spaces. Those solutions lack the scale and scope of cellular networks and are unable to make a massive difference. On the other hand, LTE and LTE-Advanced are the path to 5G, which is beginning testing in advanced markets where legacy networks will be phased out soon. For the mobile industry as a whole, accelerating LTE deployment is essential and the costs of legacy networks are a burden.
In the next five years the mobile industry should target replacing GSM with LTE worldwide, phasing out 2G and 3G networks. This will require a great deal of cooperation between the mobile ecosystem, governments and financial institutions to implement new operational models, provide political support for regulatory modernization, and mobilize new financing. The economic and social benefits of this undertaking are huge.