At the dawn of 5G, there are still a significant number of U.S. users on 3G networks that have never even connected to a 4G network. This creates an interesting challenge as U.S. carriers are hungry for more mid-band spectrum so they can more widely deploy 5G services. There is a scarcity of prime mid-band 5G spectrum in the U.S. as compared with other countries. Without new spectrum, U.S. carriers are looking to switch off old 3G networks to repurpose those bands for the new generation of wireless technology. Existing 3G networks are hogging spectrum and creating a barrier to this wireless modernization. The reason those users are not connecting with 4G, let alone 5G, is also important if the carriers are to migrate users to newer technologies.
Opensignal analyzed our U.S. installed base of millions of users to determine why these subscribers don’t connect to 4G networks. For brevity, we are calling this group of users “3G-only” users in the rest of our analysis.
Opensignal has uncovered 83.2% of 3G-only users in the U.S. lack a 4G rate plan, 12.7% of 3G-only users spent time exclusively in areas where 4G does not reach, and just 4.1% of 3G-only users lack a 4G-capable smartphone. This indicates that if U.S. carriers market compelling 4G rate plans, they can transition the vast majority of 3G-only users and accelerate their 5G deployment strategies.
The number of subscribers in the U.S. market that still use 3G networks is substantial. Global carrier organization, the GSMA, states 17% of U.S. subscribers, and 19% of U.S. wireless connections were still using 3G technology at the end of 2018.
In our analysis of our U.S. installed base of millions of users we found that there are three main reasons for some users’ dependence upon 3G networks.
1. Users do not have a 4G-capable device. We found only 4.1% of our users in the U.S. who didn’t connect to 4G networks but spent time in 4G-covered areas did not have a 4G-capable smartphone. This is unsurprising given most U.S. carriers’ choice to only sell 4G smartphones for many years and to wind down support for older devices.
2. Users do not have a 4G plan but do have a 4G device. 83.2% of our 3G-only users have a 4G-capable device and visited areas where 4G exists. But because they didn’t use the 4G network, this indicates they don’t have a 4G rate plan. Some operators, like AT&T, do not advertise their 3G-only rate plans but they do let customers keep those plans until they upgrade to a 4G device. In addition, our data shows that those 3G users who did not have a 4G rate plan connected to mobile data networks 31.9 percentage points less of the time than 4G users.
3. Users are not covered by 4G networks. 12.7% of 3G-only users spent their time in areas where we have never seen a 4G measurement on their mobile network operator. This suggests that the main reason they did not connect to 4G networks was that they lived in areas where their carrier doesn’t offer 4G yet.
3G-only users not upgrading to 4G have a sub-par mobile experience
Opensignal analysis revealed that U.S. 3G-only users that had a 4G phone and spent time in 4G areas connected to mobile data networks only 61.7% of the time. And, when they did, they experienced average 3G Download Speeds of just 3.5 Mbps, which is one-sixth of the average speed experienced by our 4G users when connected to the mobile data network.
U.S. operators need to clear 3G spectrum for 5G use
U.S. operators need more mid-band spectrum so they can more widely deploy 5G services and the 3G spectrum bands are prime spectrum that carriers can use to add capacity to 4G networks and also deploy new 5G technology.
In its recent 10K annual report, Verizon said that it is “aggressively” refarming its 3G spectrum in the 800 MHz and 1900 MHz (PCS) bands to deploy 4G and eventually 5G. The operator has said it will decommission its 3G network by year-end 2020. AT&T is also recycling its 3G spectrum in the 850 MHz and 1900 MHz spectrum for 4G and 5G and plans to shutter its 3G network in February 2022. Like Verizon, AT&T has said it is proactively working to move customers off its 3G network. But as of December 2018, the operator reported about 11 percent of its postpaid customers were still using 3G handsets.
Where 3G-only users are more prevalent
Opensignal analysis revealed that the states with the highest percentage of our users who we've never seen connecting to 4G networks were in states with large populations such as California, Texas and Florida. For example, 9.7% of 3G-only users are in California (population 39.7 million) — the highest percentage we have seen across the states. Texas (population 29.09 million) is in second place with 7% of 3G-only users.
3G-only users were less likely to be found in less-populated states such as North Dakota (population 760,900) where only 0.3% of 3G-only users were found.
Opensignal recently looked at the urban-rural divide in mobile experience in the U.S. and found that Texas had a difference in Download Speed Experience between urban and rural areas of 6.9 Mbps and an Upload Speed Experience divide of 2.4 Mbps. California’s urban-rural divide is smaller, with a difference in Download Speed Experience of 5.2 Mbps and an Upload Speed Experience divide of just 2.2 Mbps.
U.S. carriers will need to continue to entice existing 3G-only users to migrate to newer technologies so they can repurpose their mid-band spectrum for new generations of wireless technologies. Otherwise, these users may become a barrier to 5G.