The 2012 Forecast

Dec. 6, 2011
Doomsday for 2G

According to the Mayan calendar, the year 2012 will mark the end of the world. If that’s not compelling enough, then know that something else of interest to the security industry will also draw to a close in 2012: the second generation of cellular hardware products, or 2G.

As 3G smartphones have rendered landlines obsolete, 2G cellular communicators—GSM or GPRS—have been essential to maintaining customers. If you’re like most independent security dealers, 2G has allowed you to earn more recurring monthly revenue (RMR) from your existing customers, which is something to remember since new system growth has waned during the ongoing economic downturn. Indeed, cellular technology has been central to recent advancements within the industry. All-in-one panels that greatly simplified the installation process; quick replacements for lost landlines; the extension of the keypad’s functionality beyond the walls of the home; and even the vast array of new security products from small, motion-triggered cameras to access-control systems—these are but a few examples of what 2G has made possible.

Technology, however, is always evolving and 2G is giving way to 3G. In fact, the upgrade to 3G has already taken place for mobile phones: carriers wanted the newer technology because it allowed more concurrent voice calls per square mile, while consumers wanted it because of increased download speeds. Elsewhere, industries that adopted cellular for more work-day tasks like delivering alarm signals or remotely reading a power meter resisted the move to 3G. After all, adopting 3G technology can increase the price of a product dramatically without a noticeable increase in functionality.

The culmination of it all

In 2012, the transition to 3G will no longer be a matter of choice. That’s because carriers are already migrating their product lines to 3G. A major cellular carrier in the U.S. recently stopped certifying 2G-only products of any kind and remaining carriers are sure to follow suit.

Another indicator is the shift of a carrier’s preferred resources to 3G. Cellular carriers operate two overlapping networks—one at 850MHz and another at 1900MHz. While both networks support 2G and 3G, 850MHz is far better at penetrating solid structures than 1900MHz. So it’s worth noting that markets like Philadelphia have already shifted some capacity at 850MHz to 3G, which resigns the 2G devices in those areas to weaker signals as they re-attach to the 1900MHz network. Starting in 2012, this will happen more often, as will the service calls related to these changes.

The next step in the evolution process

This is why we at Telguard believe we’ll see an explosion of products in 2012 offering 3G cellular technologies. The trend started in late 2011, when Telguard launched the security industry’s first 3G cellular alarm communicator. 3G gets preferred treatment on the carrier’s network and it’s clearly the path toward which carriers are nudging their customers. As dealers evaluate product choices over the next year, they’ll need to pay close attention to the cellular technology that is powering the product and ask: 3G or the soon-to-be-obsolete 2G? The savvy dealer will realize the importance of using modern technology and choose the product with 3G.

Shawn Welsh is the vice president of Marketing and Business Development for Telular Corp., Chicago and a well-respected speaker on cellular trends.