2G and 3G Market Size | Industry Trends [2033]

2G and 3G Market Overview

The 2G and 3G Market size was valued at USD 1872237.6 million in 2024 and is expected to reach USD 2758456.78 million by 2033, growing at a CAGR of 4.4% from 2025 to 2033.

The global 2G and 3G market is undergoing a dynamic transformation as telecom operators continue phasing out older network infrastructures. By the end of 2023, over 120 countries had initiated the shutdown of 2G and 3G networks, with 83 telecom operators in 45 countries completing the sunset of 2G services. In parallel, 60 countries began decommissioning 3G services. Despite these network sunsets, approximately 2.5 billion 2G connections and 1.3 billion 3G connections were still active globally at the close of 2023, largely due to legacy applications in IoT devices, feature phones, and industrial systems.

Asia-Pacific held the highest number of 2G connections at over 1.6 billion, with India alone accounting for nearly 720 million 2G users. Africa continues to heavily rely on 2G infrastructure, where it comprised over 55% of all mobile connections. Meanwhile, Latin America showed a 24% retention rate of 3G connections as of mid-2023. Although the 2G and 3G markets are shrinking in urban zones, rural and low-income regions continue to depend on these technologies for basic communication. This transitional market is crucial for enabling migration strategies and maintaining backward compatibility across networks, particularly in the machine-to-machine communication and low-data usage segments.

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Key Findings

DRIVER: Migration needs from 2G/3G to newer network generations stimulate telecom infrastructure investments.

COUNTRY/REGION: Asia-Pacific leads due to the continued dominance of legacy connections, particularly in India, Indonesia, and the Philippines.

SEGMENT: 2G segment remains dominant in M2M and rural communication applications, accounting for over 70% of legacy device connectivity.

2G and 3G Market Trends

The 2G and 3G market is witnessing rapid network sunsetting in developed regions. As of 2024, 14 out of the 27 EU member states have completely shut down their 3G networks. The U.S. completed its 3G sunset by 2022, and Japan phased out 3G by the end of 2023. In contrast, Africa and South Asia maintain a 2G dependency rate exceeding 50% as per the GSMA 2023 data. In India, over 65% of rural mobile users rely on 2G services. Moreover, M2M (machine-to-machine) applications such as vehicle telematics, smart meters, and logistics solutions continue utilizing 2G modules due to cost-effectiveness and wide coverage.

A notable trend is the increased investment in hybrid network technologies that bridge 2G and 4G systems. In 2023, over 30 countries reported deploying NB-IoT solutions using 2G fallback to support low-bandwidth IoT applications. The market also shows increased demand for refurbished 3G handsets and modules, especially in African and Latin American secondary markets, where over 22 million units were resold in 2023. Meanwhile, operators are offering trade-in programs and spectrum re-farming plans to phase out outdated infrastructure. As 4G and 5G expand, the trend includes reallocation of 900 MHz and 2100 MHz bands previously used for 2G/3G, creating both opportunities and displacements.

2G and 3G Market Dynamics

Market dynamics refer to the forces and factors that influence the behavior, direction, and performance of the 2G and 3G market. These dynamics include drivers, restraints, opportunities, and challenges, each playing a vital role in shaping the market's evolution.

DRIVER

Migration needs from 2G/3G to newer network generations stimulate telecom infrastructure investments.

The rising demand for data-intensive services and spectrum efficiency is pushing governments and telecom providers to retire 2G and 3G networks. In 2023, over 70 global operators initiated investments in upgrading to 4G/5G technologies. For instance, in Europe, more than 60% of 3G bandwidth has been reallocated for 4G LTE, enhancing download speeds by 35%. In India, Bharat Sanchar Nigam Limited (BSNL) is expected to replace over 150,000 2G towers by 2025 with 4G/5G infrastructure. This transition also supports governmental objectives like India’s Digital Mission and Africa’s Smart Africa initiative. As users migrate to smartphones, demand for voice-over-LTE (VoLTE) has surged by 47% globally.

RESTRAINT

Dependence on 2G/3G in rural and underdeveloped regions.

Despite global transitions, low-income regions in Africa and South Asia continue to rely heavily on 2G/3G networks. As of 2023, over 720 million users in India and 530 million across Sub-Saharan Africa remained connected to 2G. Additionally, 2G feature phones cost as low as USD 10, compared to entry-level smartphones at USD 60. Infrastructure limitations in remote regions also delay 4G rollout. For example, less than 38% of rural Nigeria is covered by 4G services. Governments hesitate to sunset legacy networks due to the risk of leaving populations disconnected, posing a challenge to full network modernization.

OPPORTUNITY

Expansion of IoT and machine-to-machine communication using legacy networks.

IoT solutions using 2G networks continue to offer substantial opportunity in logistics, agriculture, and utility sectors. In 2023, nearly 420 million M2M connections globally still used 2G and 3G networks due to their affordability and extensive geographic reach. Over 60% of all agricultural sensor modules in Southeast Asia rely on 2G-based telemetry. The rise of connected vehicles in regions with inconsistent 4G coverage further underscores the value of fallback options using legacy networks. Major OEMs, including Bosch and Sierra Wireless, continue supplying 2G/3G-enabled IoT modules in volumes exceeding 50 million units annually.

CHALLENGE

Rising costs of maintaining outdated infrastructure and limited hardware support.

Maintaining 2G/3G infrastructure is becoming financially unsustainable for operators. In 2023, European telecom providers reported average yearly maintenance costs of USD 48 million per network. Additionally, chipmakers have reduced production of 2G/3G components; Qualcomm reduced its 3G modem shipments by over 60% between 2020 and 2023. Network equipment for legacy technologies is now produced by fewer vendors, leading to increased procurement costs. The lack of skilled technicians familiar with older architectures further exacerbates operational challenges. These factors complicate decisions around supporting legacy users versus accelerating shutdowns.

2G And 3G Market Segmentation

The 2G and 3G market is segmented by type and application. By type, it includes 2G, 3G, and transitional usage involving 4G fallbacks. By application, the segments include voice, messaging, data transmission, and video services. Over 2.5 billion global connections were still supported by 2G as of 2023, with the majority catering to voice and M2M communications. Approximately 1.3 billion users were connected to 3G networks for data and voice applications. Messaging services remain dominant in Africa and South Asia, where over 30 billion SMS messages are sent monthly.

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By Type

2G: As of 2023, 2G accounted for over 60% of all mobile connections in Sub-Saharan Africa. India remained the largest market, with more than 720 million 2G subscribers. 2G networks are critical in agriculture, transportation, and utilities due to lower power consumption and operational costs. Over 300 million M2M modules still use 2G, especially in low-speed telemetry.
3G: While declining in urbanized countries, 3G still served around 1.3 billion global users in 2023. Southeast Asia and Latin America remain major users, with Indonesia and Brazil collectively accounting for over 220 million 3G subscribers. 3G offers better data rates than 2G, supporting web access and video streaming. However, with over 40 operators announcing shutdowns, the transition pace is accelerating.

By Application

Message: 2G and 3G networks have long supported Short Message Service (SMS), which remains a vital communication tool in many regions. As of 2023, over 30 billion SMS messages were sent monthly via 2G networks in India and Sub-Saharan Africa. Messaging is still heavily used in regions with low smartphone penetration and poor internet access. For instance, in Nigeria, more than 55% of mobile users rely on SMS for daily communications. SMS is also used for transactional services, such as banking alerts and mobile payments, especially in markets where data networks are unstable or expensive.
Voice: Voice communication is the primary use-case for both 2G and 3G networks. As of 2023, over 2 billion global users still made voice calls via 2G and 3G networks. In rural India and parts of Southeast Asia, over 60% of users depend on 2G networks for voice connectivity due to the affordability of feature phones. 2G networks use GSM for circuit-switched voice services, offering widespread compatibility and efficient spectrum use. 3G supports circuit-switched fallback for voice where VoLTE is unavailable. In Sub-Saharan Africa, over 70% of mobile calls are still routed through 2G networks.
Data: 3G marked a major upgrade by enabling mobile internet access. As of 2023, more than 1.3 billion users globally relied on 3G networks for data services. Countries like Indonesia, Bangladesh, and the Philippines maintain over 40% of data users on 3G. The typical 3G download speed ranges between 1 to 5 Mbps, sufficient for browsing, email, and social media. 2G networks, with a maximum throughput of 0.1 Mbps, are used for basic data tasks such as USSD transactions, email without attachments, or IoT sensor reporting. In rural areas of Africa, 2G remains the backbone for many mobile internet services.
Video: Video services over 2G are not feasible due to extremely low bandwidth. However, 3G networks support low-resolution video streaming. In Latin America, over 42% of rural video content was streamed through 3G connections in 2023. Platforms have introduced data-lite video apps to accommodate 3G users in emerging markets. In India and Bangladesh, over 120 million users accessed video content via 3G at resolutions under 480p. Although video is not a core 2G feature, multimedia messaging (MMS) and compressed clips can be exchanged under optimal conditions.

Regional Outlook for the 2G And 3G Market

The global 2G and 3G market displays stark regional contrasts. While developed regions continue aggressive network decommissioning, emerging markets retain legacy systems for affordability and coverage.

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North America

In North America, 2G and 3G have been largely phased out. As of 2023, major operators like Verizon and AT&T have shut down their 3G networks. The U.S. had less than 2 million active 2G users and fewer than 6 million 3G connections by early 2023. Canada also began phasing out its 3G networks in Q2 2023. The region is now focused on 4G LTE and 5G deployment, with over 85% of connections being 4G or higher.

Europe

Europe is progressing toward complete legacy network retirement. Germany, France, and the UK have already completed their 3G shutdowns. In 2023, less than 5% of mobile connections in Europe used 2G, and under 7% used 3G. Eastern Europe still retains some 2G networks for M2M and rural users, with Poland and Romania reporting over 12 million legacy connections.

Asia-Pacific

Asia-Pacific is the largest market for 2G and 3G users, with over 2 billion active connections as of 2023. India, China, Indonesia, and Vietnam account for the bulk of users. India alone had 720 million 2G and 180 million 3G users in 2023. China’s state-owned carriers are pushing for 4G/5G, but still supported over 300 million 2G/3G users. In Indonesia, 2G comprised 43% of connections in rural areas.

Middle East & Africa

In the Middle East & Africa, legacy networks dominate. As of 2023, over 530 million users in Africa were on 2G, and around 180 million on 3G. Nigeria, Kenya, Egypt, and South Africa are major contributors. In the Middle East, countries like Iraq and Yemen still depend on 2G for over 50% of connections. Infrastructure limitations and affordability remain key barriers to transition.

List of Top 2G and 3G Companies

AT&T
Verizon
China Mobile
NTT
Telefonica
Deutsche Telekom
America Movil
Orange
China Telecom
KDDI
China Unicom
AIS
T-Mobile
Bell Canada
Telus
Telenor
Swisscom
SK Telecom
Korea Telecom

China Mobile: As of 2023, China Mobile maintained over 430 million 2G and 3G subscribers, largely due to its reach in rural provinces. It operates the largest legacy network infrastructure in the world.

AT&T: Despite completing its 3G shutdown, AT&T served over 180 million legacy users during the transition period across North and Latin America, with significant investments in VoLTE and network refarming.

Investment Analysis and Opportunities

Investment in the 2G and 3G market remains significant in regions where legacy infrastructure still plays a strategic role. In 2023, over USD 3.5 billion was spent globally in maintaining, upgrading, or transitioning away from 2G/3G networks. Governments in Asia-Pacific and Africa directed more than USD 900 million in public funding to support rural connectivity using legacy networks. Telecom operators invested in migration solutions, including dual-mode base stations and software-defined radios that support both 2G and 4G.

Key investment areas include M2M applications using 2G, with India alone deploying over 140 million M2M modules for smart metering and fleet management. In Africa, NGOs and governments invested in solar-powered 2G towers, with 12,000 units installed in 2023. Meanwhile, the demand for legacy-compatible chipsets spurred investment by module manufacturers in Southeast Asia, where over 200 million low-cost SIM modules were shipped in 2023. Opportunities remain robust in public safety, transport logistics, and agricultural telemetry.

Governments are also collaborating with telecom companies to reallocate spectrum while ensuring backward compatibility. For instance, Japan’s MIC agency worked with NTT and KDDI to reassign 2100 MHz frequencies while maintaining services for 2.3 million 3G-only users. Hybrid investment models combining legacy support and next-gen transition are gaining traction.

New Product Development

Despite the maturity of 2G/3G technology, product development continues to meet demand in specific applications. In 2023, more than 85 new 2G-enabled IoT modules were introduced, targeting agriculture, utility, and automotive sectors. Notably, Quectel launched a new ultra-compact 2G module, M26-Plus, aimed at low-power industrial applications. The device supports extended temperature and voltage ranges, enabling deployment in harsh environments.

Sierra Wireless released an integrated 2G/3G fallback module for automotive telematics, supporting over 45 vehicle brands operating in mixed network environments. Meanwhile, Vodafone’s M-Pesa team introduced a 2G-optimized payment device in East Africa, which recorded 6.2 million transactions in Q3 2023 alone.

Global chipset manufacturers introduced 2G/3G backward-compatible chipsets integrated with NB-IoT support. For example, MediaTek released the MT6261D platform in 2023, targeting markets in Africa and Southeast Asia. Software innovations include lightweight VoIP apps designed for 3G bandwidths, used by over 18 million users in Tier-2 cities across South Asia.

Five Recent Developments

China Mobile launched a rural IoT program using 2G modules across 15 provinces, connecting over 38 million devices.
MTN Group installed 3,200 solar-powered 2G towers in remote African villages.
BSNL announced phase-wise replacement of 150,000 2G towers with 4G-compatible infrastructure.
Verizon completed the transition of 5.4 million users from 3G to LTE VoIP in early 2023.
Telkom Indonesia launched trade-in programs for 3G devices, targeting 7.5 million users by end of 2024.

Report Coverage of 2G and 3G Market

This report covers the current state, ongoing transitions, and future outlook of the global 2G and 3G market. It includes segmentation by type (2G, 3G) and application (voice, messaging, data, video). Regional analysis spans North America, Europe, Asia-Pacific, and Middle East & Africa. Key company profiles include leading telecom operators and module manufacturers. The report discusses infrastructure investments, market dynamics, opportunities in M2M applications, and policy implications. Emerging trends, such as hybrid networks and IoT compatibility, are analyzed. The coverage includes technological upgrades, regulatory responses, product developments, and strategic partnerships initiated from 2023 to 2024. This report offers factual, non-speculative data to guide telecom operators, policymakers, and technology investors navigating the sunsetting yet strategically significant 2G and 3G market.