Less Than Half of SIMs in Germany Use High-Speed Networks

Less Than Half of SIMs in Germany Use High-Speed Networks

Only 47 percent of German SIM cards use 4G/LTE networks as of the end of 2018, according to the country’s Federal Network Agency. The agency cited many low-cost service providers that do not yet provide access to LTE, as well as end-users who hang onto older devices.

At the same time, spectrum licensing requirements are forcing mobile operators to focus more on LTE network coverage, in order to meet minimum speeds of 50 Mbps for at least 98 percent of households in Germany by the end of 2019. The report said this could cause problems for the consumers who still rely on 3G, as the spectrum is shifted to 4G and 5G networks. Mobile operators are already planning to shut down their 3G networks. Vodafone is aiming for the period 2020–21, and Deutsche Telekom is expected to phase out 3G coverage by the end of 2020.

Oliver Krischer, deputy leader of the Greens parliamentary group, said that more needed to be done to protect 3G users, including a two-year moratorium on decommissioning 3G network sites, according to a news report. Krischer also wants stronger rights for third-party service providers to gain access to LTE networks.

Tarifica’s Take

As the telecom speed race continues worldwide with great fanfare in the media, this report from a highly developed market is a timely reminder that many users are at risk of being left behind or already are left behind. It is quite startling to realize that in Europe’s largest national economy, more than half the connections are still 3G. Of course, the German government is taking a strong hand in pushing all operators—very much including budget MVNOs—toward high-speed service in the near future. But there is a substantial risk that as operators shut down 3G networks, legacy users will be negatively affected because they do not have LTE-compatible devices, let alone 5G devices.

Politicians such as Oliver Krischer are advocating for the protection of these users and for making it easier for smaller MNOs and MVNOs to deploy high-speed service. But the major operators should also realize that it is in their interest not to move ahead so quickly that they leave a significant portion of their own customers in the lurch. Keeping 3G networks active long enough for customers to comfortably make the transition to 4G/LTE is simply good business, from a retention point of view, and especially so given the large number of 3G SIMs. The number is so big that budget providers could hardly account for all of them.

If operators want to move everyone over to LTE as soon as possible and be able to phase out 3G, they should do everything they can to place LTE-compatible devices in the hands of their subscribers at affordable prices. And in the larger sense, a time of transition between old and new network technologies will also have to be a time of creative strategy in terms of keeping prices down.