Optus announces 2G network shutdown from 2017

Optus has announced that it will not be offering 2G services to customers beyond April 2017, more than a year after incumbent telco Telstra made a similar announcement.

Optus has announced that it will cease offering its 2G service from April 1, 2017, with the telco to shut down its 2G GSM network coming as a result of increased 4G uptake by customers.

"Greater smartphone usage and advances in 4G technology are driving customer preferences for more mobile data and faster speeds, and there has been a steady decline in 2G traffic and customers in the last few years," said Dennis Wong, acting managing director for Optus Networks, on Wednesday morning.

"2G now constitutes a fraction of our total mobile network traffic, and is declining significantly year on year. Mobile service providers globally, including in Australia and our parent company Singtel in Singapore, are closing down 2G networks to support newer technologies."

The shutdown will also affect wholesale providers currently piggybacking off Optus' 2G network.

Singtel, along with fellow Singapore telcos StarHub and M1, announced in June that they would cease offering 2G services by April 2017.

"Today, the majority of mobile customers are on 3G and 4G networks; only an extremely small percentage of customers remain on 2G-only mobile devices," Singapore's three telcos said in a joint statement.

Australia's largest telco Telstra said over a year ago that it would be shutting down its 2G network by the end of 2016, providing a similar two-year window to allow customers to migrate over to 3G and 4G services and devices.

"We have seen steep declines in the number of customers on 2G to the point where today 2G traffic accounts for less than 1 per cent of our total network traffic [and] we have not sold a 2G phone for several years," Telstra's group managing director of networks Mike Wright said in July last year.

"Shortly, we will start to contact customers who may be affected by the 2G closure to explain the changes and to provide them with their options. For Telstra Retail customers, this may be simple, as many already have 3G phones but have not upgraded their SIM card.

"For others, they may need to change to a compatible 3G/4G handset."

The steady transition from 2G to 4G is helped along by declining demand for voice and text services, and increasing popularity of communications apps including Facebook Messenger and WhatsApp, which use data.

"I think you've seen us starting to move away from being very mobile focused to one that is about integrating communications and entertainment for customers, regardless of where they are," Optus CEO Allen Lew said in April.

In this vein, Optus recently began offering six-month Netflix subscriptions bundled in with mobile contracts, with the video-streaming service unmetered on Optus' network.

Optus added that upon shutting it down, it would subsequently re-allocate parts of the 2G spectrum.

Optus has yet to report its results for the first half of 2015; however, in May, it reported adding 42,000 net new customers in the first three months of the year.