Singapore telcos set to retire 3G services by mid-2024

Experts from Arthur D. Little say phasing out 3G clears the path for the more efficient and secure 5G technology to advance Singapore’s smart nation ambitions.

Singapore’s leading telecommunications companies, including M1, Singtel, and StarHub, are moving towards retiring 3G services by July 2024. This decision reflects a global trend as the world shifts toward more advanced technologies.

The Singapore Business Review spoke to experts at Arthur D. Little (ADL) about this development and they made a compelling case for the transition, emphasising the importance of increased efficiency and innovation in the city state’s mature telecom market, which has been experiencing declining service revenues.

Why is it vital for telco operators to retire their 3G networks?

Posed with this question, Abhishek Srivastava, principal at ADL’s TIME practice, said: “Singapore is a mature market with declining service revenues. Phasing out 3G networks leads to both operational and spectrum efficiency.”

He stressed that retiring the 3G network not only ensures leaner operations but also paves the way for higher data rates and the introduction of new services.

Joining the discussion, Subrat Gupta, manager at ADL, said that “retiring 3G clears the path for 5G, which will enable new use cases or transition existing ones.”

Gupta cited potential applications in the internet of things (IoT) for smart cities and augmented reality as some of the opportunities opened up by 5G. “Moreover, newer networks like 5G offer superior security and align better with global standards,” he said.

But the retirement of 3G networks is not just about upgrading to the next generation of mobile technology. It is more about Singapore’s vision of becoming a smart nation, where cutting-edge technology drives innovation, attracts foreign investments, and fosters environmental sustainability through energy-efficient networks.

Whilst this vision is clear, concerns arise regarding the potential drawbacks of the transition.

Srivastava pointed out that though the move to 5G is beneficial for most industry players, there could be minor hitches, especially for companies that utilise 3G-enabled IoT devices. Nevertheless, he remains optimistic. “For customers, less than 1% are on 3G devices in Singapore, so the impact is minimal,” he said.

Gupta shared this broader perspective that the impact on customers in Singapore is anticipated to be minimal.

What he acknowledged though is that the 3G shutdown will have “wider implications just beyond the smartphones… across multiple industries.”

The likes of IoT devices, older smart meters, GPS trackers, and even point-of-sale terminals depend on 3G networks, noted Gupta. So as these networks phase out, these devices will require upgrades or replacements, potentially impacting various sectors.

This brings the argument back to national ambitions as the driver for this shift. “Phasing out 3G supports Singapore’s aspirations of becoming a smart nation. A robust 5G infrastructure will stimulate technological innovation, invite foreign investments, and support environmental sustainability,” Gupta reiterated.

However, he did caution about the potential widening of the digital divide. “Low-income households might face difficulties in acquiring new, compatible devices. Yet, given the small percentage of affected subscribers, this issue could be minimised with subsidies from both telcos and the government,” he said.

On how the 3G exit might expedite 5G adoption in Singapore, Srivastava sought to pave the way for clarity. “Firstly, the freed-up spectrum, combined with resources previously spent on 3G, will be better deployed towards 5G,” he told the Singapore Business Review. “Secondly, as customers and enterprises transition to 5G, a new range of products and services will gain widespread use.”

As Singapore moves towards a future without 3G, it’s evident that whilst there might be minor challenges, the potential benefits far outweigh the drawbacks. It is inevitable for 5G to take centre stage as the nation is poised to be at the forefront of technological innovation in telecommunications.