2G Cell Networks to Go Offline by 2017

Dear Alarm Professionals:

As you may have heard, AT&T has announced plans to phase out 2G cell networks by 2017. Coverage is already being reduced in some areas as they make the switch to 3G/4G.

Since this will have a far-ranging impact on our industry, I've provided some answers below to help you understand how these changes could affect you.

Now is the time to talk about 4G and WiFi to ensure your accounts' longevity. Please give me a call if you have any questions or would like to discuss your current options.

Sincerely,

Howard Avin
Vice President Sales & Marketing


How will this impact the systems I have already installed?
This phasing out of 2G will affect 3 millions active security accounts. All major security manufacturers up to this point have been using 2G technology for GSM cell units.

What are my options for new installs?
NationWide Digital has partnered with Honeywell, which is the first manufacturer to market a 4G HSPA+ and WiFi alarm communicator. While 3G may not be phased out for several more years, it's important to protect your future account investment by supplying 4G and WiFi solutions that will soon become the industry standard.

What about existing installs that will require upgrade from 2G?

Details on upgrades will soon follow. We understand this is a pain point for your business. Though we do not have control over the changes in GSM technology, we will absolutely use our best efforts to support you with the change outs that will be required over the next 4 years.

What's the difference between 2G, 3G, 4G HSPA+ and 4G LTE?

The different technologies offer higher data speed rates, which in turn allows the cellular network to be more efficient. So the newer the cellular technology, the more users they can have per slot on the cell network.

For the non-technical folks, here is the difference:
2G - Slow
3G - Fast
4G HSPA+ - Very fast
4G LTE - Crazy fast


Why does GSM speed matter for the security industry?
Higher speed = more users that can use the same cell network resource at same time. So higher speed networks will give you longer life. Also, high speed cellular networks pave the way for future technologies such as live streaming video.

Why not use 4G LTE if itís the fastest technology available today?
4G LTE coverage is still years away from providing the extensive signal coverage of 4G HSPA+ and cost efficiency. 4G LTE would be about ~25% more expensive to implement. We know these additional costs will come down and coverage will improve. As the 4G LTE network improves we certainly will evaluate launching an 4G LTE product offering when it becomes more feasible for the industry.

What are the pros and cons of offering a WiFi or hardwire IP-based solution?
The advantage of an Internet offering is the speed of communication, higher level of supervision, no need to worry about the next GSM sunset and most importantly the positive impact on your account creation and ongoing fixed costs. An IP-based account would save approximately ~$50 on the upfront product costs and an additional ~$3.50 per month once the account is live. This is when compared to a similar GSM-based account. If you use 7 years as the average life of your accounts, an IP account would result in ~$350 net profit per account.

The disadvantages of an Internet offering is lack of power backup, and in some cases the line is exposed outside the home and may be cut. To address this issue would be a clause added in your end-user agreement allowing the homeowner to opt in/out of purchasing a GSM backup. By doing this, you will now put your sales team in a position where they would be upselling the GSM vs. giving it away to get the deal. Our industry has moved to ~60% of all new installs receiving GSM due to homeowner not having landline and resulted in many of you allowing your sales teams to include GSM with every install which has resulted in higher account creation costs.


For more information call (800) 221-0826
or email havin@nationwidedigital.com