Understanding 3G Usage In New Zealand Ahead Of The 2025 Shutdowns

Next year, New Zealand’s mobile operators — 2degrees, One NZ and Spark — plan to shut down their 3G networks. In this latest Opensignal analysis, we show the degree to which our Kiwi users still rely on 3G, why some users aren’t connecting to 4G and the gap between the experience of 3G-only and 4G-only users (users that connect to 4G but have never connected to 5G).

Key findings

• Kiwi users are currently spending 6.9-7.8% of their time connected to 3G on average — depending on their choice of operator — down from the 11-15.8% seen in Q2 2022.
• Out of our users that never connect to 4G or 5G, the overwhelming majority, 82.2% have both a 4G-capable device and spend time in areas where there is 4G coverage. These users are either lacking a 4G-capable SIM card or have 4G disabled on their phones.
• There are good reasons why users that are currently not using 4G should start doing so. Users that connect to 4G spend more time with a 3G or better connection and see average overall download speeds that are nearly five times faster than those seen by 3G-only users. Similarly, our 5G users see average download speeds that are 8.6 times faster than 3G-only users.
• 4% of our 3G-only Kiwi users either don’t have a 4G-capable phone or have a 4G-capable phone that doesn’t support Voice over LTE.
   

Mobile operators around the world are switching off their 3G networks and New Zealand is no exception. The reason behind this is simple: there is nothing that can be done on 3G that can’t be done better on 4G and 5G. Keeping 3G adds to the complexity and cost of operating mobile networks and ties up valuable spectrum that would be better served improving the experience of the vast majority of users who have 4G and 5G capable devices.

However, while 3G switch-offs might sound like binary on/off events, they are an extended process, as operators have to do several things before they can turn off their 3G networks such as:

• Stop selling 3G-only devices and 3G-only plans — for example, in New Zealand 2degrees stopped selling 3G-only phones in mid-2022.
• Run campaigns to help users switch to 4G-capable devices and enable 4G functionality in phones that are 4G-capable but aren’t connecting to 4G due to user settings/mobile plans.
• Build up 4G and 5G coverage in areas that are currently served only by 3G.
   

Operators often take a staggered approach to shutting down 3G networks — starting in areas where there is excellent 4G coverage, while they are still building up 4G coverage in other areas. A successful 3G shutdown is one in which users see minimal disruption and an improved experience. For example, in Australia where Vodafone has started shutting down its 3G network on a region-by-region basis, our Vodafone users in the country’s eight largest cities saw little change in the amount of time they spent with no signal and the reduction in the time spent connected to 3G was compensated by an increase in time spent connected to 5G. If 3G shutdowns are mishandled, then users can find themselves spending more time without a cellular signal.

One NZ plans to shut down its 3G network by the end of March 2025 while Spark and 2degrees are seeking to do the same towards the end of 2025.

Looking at the proportion of time our users spend connected to 3G (Time on 3G), the overall trend is downward. However, progress appears to have slowed in recent quarters. Back in Q2 2022 our users spent 11-15.8% of their time connected to 3G — depending on their choice of operator. This dropped to 6.9-7.8% in Q1 2024, but there has been relatively little change from the previous quarter. The time spent connected to 3G will drop to zero for each operator once they have completed their 3G shutdown but for now it’s clear that users are relying on 3G networks for a small but significant portion of their time.

An overwhelming majority (82.2%) of our users that have never connected to 4G or 5G have 4G-capable smartphones and spend time in areas where other users on the same mobile network have connected to 4G. These users are either lacking a 4G-capable SIM card or have 4G disabled on their phones. While working with users to address this issue will not be without its challenges and will require effort on the part of operators, it is relatively easier to fix than coping with a huge pool of 3G-only devices or users who never connect to 4G due to a lack of coverage.

There is a good reason for users to enable 4G — 3G-only users are missing out on a much better mobile experience. To ensure a more meaningful comparison, we have compared the experience of our 3G-only users against our 4G-only users, as both groups are likely using older devices compared to users who connect to 5G. Our 4G-only users spend 98.6% of their time with a 3G or better connection — seven percentage points higher than that seen by 3G-only users. The difference between these two user groups is more dramatic for overall Download Speed Experience. Our 4G-only users see average download speeds of 37.2Mbps, nearly five times faster than those seen by 3G-only users. We define 3G-only users as those users who have never connected to 4G and 5G, while 4G-only users are those who have connected to 4G but not to 5G.

If 3G-only users were to upgrade to 5G-capable smartphones and 5G subscriptions, the gains in mobile experience would be even higher. Our 5G users (those that were seen using the latest generation network) see average download speeds that are 8.6 times faster than those seen by our 3G-only users.

In the absence of 2G and 3G networks, the only way of making normal mobile voice calls is via Voice over LTE (VoLTE) or its 5G standalone access equivalent — Voice over New Radio (VoNR). 2Degrees and Spark have already shut down their 2G networks, while One NZ will shut down its 2G network at the end of 2025. Devices that aren’t 4G capable and even some older 4G devices don’t have these capabilities, posing safety issues given the need to make emergency calls.

To give some idea of the scale of this problem, of our 3G-only Kiwi users (those that have never connected to 4G or 5G) for which we have data on their devices' ability to support VoLTE — four percent either have a phone that isn’t 4G-capable or have a 4G-capable phone that doesn’t support VoLTE. A similar percentage (4.2%) of our 4G-only users (those that have connected to 4G but have never connected to 5G) have devices that aren’t VoLTE capable. However, we can expect the number of non-VoLTE capable devices to fall further as we approach the 3G switch-offs given that the vast majority of new smartphones being sold today are VoLTE capable.

Clearly, turning off New Zealand’s 3G networks is not without its challenges, but in the long-run it will benefit both operators and consumers. Operators will benefit from simplified operations, while users are likely to have an enhanced mobile experience — both from the refarming of 3G spectrum and from migrating to 4G and 5G. Look out for future insights in which we assess the impact of the 3G switch-off on the New Zealand mobile experience.

© Scoop Media