Reader Forum: What will the first LTE phone do?

Editor’s Note: Welcome to our weekly Reader Forum section. In an attempt to broaden our interaction with our readers we have created this forum for those with something meaningful to say to the wireless industry. We want to keep this as open as possible, but maintain some editorial control so as to keep it free of commercials or attacks. Please send along submissions for this section to our editors at: dmeyer@ardenmedia.com or tford@ardenmedia.com.
The mobile world is moving to LTE. The sudden shift by consumers to smart phones accelerates the need for LTE. Smart phones, with their big screens and access to mobile web content, are proving to be data-bandwidth hogs. Consumers want high-quality access to the mobile Internet at all times, and smart phones deliver.
Mobile operators are responding to this demand by increasing the use of Wi-Fi and femtocells to increase capacity and improve coverage, but longer term, LTE is ideally suited to support this brave new mobile data world.
LTE is the most efficient radio access network available today. It offers the highest capacity at the lowest cost-per-bit GSM operators have ever seen.
It’s no wonder that operators like Verizon and AT&T have announced aggressive plans to launch LTE service nationwide, while modest deployments by Telia in Stockholm have already begun. According to the GSA, more than 80 operators worldwide have committed to deploying LTE.
Thus it’s with great anticipation that the world awaits the first LTE handsets. It is generally agreed that initial LTE service launches will be with USB dongles. But the only way to address the growing data demands of smart phones, and to provide an adequate return on operators’ massive network investments, is to have mainstream mobile subscribers and phones on LTE.
What will the first LTE phones look like? Frankly, they will look a lot like today’s smart phones, with big screens and lots of bells and whistles to take advantage of the high-speed connectivity offered by LTE. Presumably, consumers will make calls, send text messages and connect to the Internet – all the things they can do today.
In the U.S., we already have a pre-cursor, the new HTC Evo from Sprint. The Evo, which uses Sprint’s cellular network in combination with Clearwire’s WiMAX network, is arguably a ‘4G’ phone. The reviews are predictable: the phone is gorgeous, with all sorts of video streaming support/services, but struggles with poor battery performance and has no support for Sprint voice services when attached to the 4G network. What? We can’t make a phone call with our ‘smart’ phones?
WiMAX is an all-packet transport network, like LTE, but is unlike traditional cellular networks that support circuit paths for voice. Therefore the existing voice services are not natively supported, and Evo users cannot make a call on the 4G network.
Is the lack of voice on 4G due to the fact that is was too difficult to seamlessly integrate the cellular and WiMAX baseband chips to provide a seamless experience? Clearly this issue can and will be addressed as baseband manufacturing volumes increase.
Or is it something deeper? Is this because Sprint’s core network isn’t ready to support voice over the packet-based 4G network? Or is this a conscious decision by Sprint to abandon voice services in this new packet access world? These ideas and questions are starting to bubble to the surface.
arly this year, European-based mobile consultancy firm Northstream issued a report entitled, “LTE – The Bigger Picture.” In the report, the firm questions if voice makes sense over this new 4G network.
The report states: “Sooner or later, operators must decide whether to invest in voice, or whether to slowly exit the voice segment as GSM networks approach their end of life. Some operators may conclude that LTE voice revenues do not justify the related cost and uncertainties.”
This is a truly a shocking pronouncement given voice revenues typically account for 70% to 80% of mobile operator revenues. However, there seems to be support for this opinion from other firms as well. A recent ABI Research report suggests that mobile voice service revenues will peak in 2010, after which time they are likely to start declining.
Central to an operator’s decision on a voice over LTE strategy is the technology used to provide the service. The mobile industry is rallying around the GSMA’s new voice over LTE (VoLTE) initiative. The VoLTE group is working to define a simplified version of IMS suitable for supporting LTE voice services.
Yet, it’s this investment in an entirely new IMS structure which caused Northstream to issue their pronouncement. At what point does the investment outweigh the return – especially for a service with declining revenues?
The ideal voice over LTE solution would bring the operator’s existing GSM voice services forward to LTE at an extremely low price-point. It would leverage the massive installed base of operational and business support systems, while providing subscribers a consistent user experience between LTE and the GSM networks. It would turn the existing GSM service into a mobile VoIP application that can blend with data applications to generate more revenues.
This solution is called VoLGA, and it exists today.
In an article posted to RCR Wireless News, Bryan Davies, director of marketing with Alcatel/Lucent, urged operators not to provide ‘empty’ pipes. He said it was “absolutely critical service providers must include a strategy for service delivery” on LTE. He pointed out there are many, many over-the-top voice and video services just waiting for a high-speed, low-latency pipe to connect their subscribers.
At the end of the day, the world’s first LTE phone needs to be able to make a phone call. Mobile providers can’t afford to leave voice services behind.
Steve Shaw is a VP of corporate marketing at Kineto Wireless.