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With only four commercial deployments of voice over LTE networks globally – three in Korea and with MetroPCS in the United States – it’s safe to presume that it’s still a relatively nascent technology. But with major operators including AT&T and Verizon Wireless planning to implement VoLTE in 2014 and subsequent years, VoLTE seems to be on the trajectory to become the new de facto standard for voice communications.
As LTE networks continue to saturate emerging and developed markets, some mobile operators appear to be holding back on VoLTE deployments because of the uncertainty of what VoLTE can do for them from a commercial perspective. Others, on the other hand, realize the benefits of VoLTE and, like AT&T and Verizon Wireless, already have VoLTE strategies in place. Let’s look at both sides of this story.
Data services typically make up a majority of an operators’ revenue but telephony service is maintaining its position as a fundamental offering. At its simplest form, VoLTE just needs to ensure that voice and SMS applications are on par with preceding services. But being an all-IP technology, VoLTE has a greater potential that goes above and beyond supporting basic voice and data services by enabling a whole suite of next-generation rich communications services such as HD voice, instant messaging, video chat, presence and group chats, and of course, seamless call hand off among LTE-to-LTE and LTE-to-2G/3G networks.
Operators who have a VoLTE strategy in place are neutralizing the threat of over-the-top service providers (i.e. VoIP) launching more sophisticated services and securing the revenue of an operators’ most fundamental offering. VoLTE will allow operators to reclaim some of the revenue taken from them by OTT voice service providers by empowering them to offer significant advantages over OTT services, such as seamless mobility, quality of service, and call continuity and reliability.
Where 2G and 3G indoor cellular coverage from mobile operators are poor, mobile subscribers are unable to make or receive calls. LTE networks and a compatible device allow users to receive great LTE signal for telephony – five bars of coverage no matter where they are.
With all these potential revenue-generating benefits and a means to increase subscribers’ quality of experience, why are VoLTE deployments still moving at a glacial pace?
For one, provisioning circuit-switched fall back to support voice in an LTE environment has contributed to delayed deployments. Older cellular standards have always included a dedicated communications channel to carry voice calls. LTE is optimized for data transfer and designed as a packet-switched, all-IP system so it does not natively support the antiquated circuit-switched protocol. So, when making or receiving calls on an LTE network, the handset “falls back” to the legacy circuit-switched 2G/3G network. Sounds simple, but initial tests have shown that it can take three to six seconds for a call to fall back, ultimately resulting in poor user experience.
However, with the proper architectural framework, operators can resolve this incompatibility. VoLTE uses the IP Multimedia Core Network Subsystem architectural framework which allows for ubiquitous multimedia access using a common IP interface. Using this framework, connections over different protocols can be bridged together, enabling VoLTE to interoperate with circuit-switched voice networks without having any dependency on them.
Another culprit in the delay of VoLTE deployments is the current number of VoLTE-compatible handsets available on the market. This seems like a catch-22 because who needs VoLTE handsets if the service is unavailable, and which operator would launch VoLTE services if there are no compatible handsets?
Verizon Wireless has put it on themselves to resolve this by offering the service and the handsets. Having recently established their 500th LTE market, Verizon Wireless indicates that they will make available LTE-only phones by next year. These phones will be cheaper, thinner and have better battery life because they only need one cellular radio. Verizon Wireless is also planning to offer large subsidies for these devices to help saturate the market in their mission to become a pure LTE service provider. This seems like a viable business model. The company has played an integral role in advancing the uptake of LTE, claiming that its LTE service covers more than 99% of its 3G network and is available to more than 95% of the U.S. population.
There are not many applications that are readily available that can leverage VoLTE’s complete capabilities including multimedia applications and rich communication services features. Many of the services that are currently deployed in 3G CS networks have to be migrated from 3G CS to VoLTE networks. This is one of the major hindrances as subscribers would not like to move to VoLTE without getting the services that they were already getting. VoLTE can allow many more value-added services such as connecting to existing enterprise address books, personalized central contact books and easy migration to new devices as contacts and other device information are placed in the cloud. The multiple IMS-based services, RCS and multimedia calls can be used in a very efficient manner to define many VAS.
One main final issue holding operators back from deploying VoLTE are their concerns around seamless implementation of the technology. With simplicity in mind, operators must ensure that subscribers are provided with the same user experience when moving to LTE. Achieving this requires a lot of work behind the scenes. Meanwhile, operators must shield subscribers from the complexities of the entire migratory process or risk a decrease in user satisfaction from subpar service. However, there are services and support available to help navigate the entire process to make it as seamless as possible, from supplementary services support, back office systems support and domain expertise.
When VoLTE becomes more widely available, consumers may not initially care about how robust the voice services are. As for complementary services such as IM and video chatting, they are probably already using their preferred services. What they will care about is how VoLTE and advanced LTE services seamlessly integrate into their everyday lives, so operators have to realize that a combination of VoLTE, HD voice, seamless hand off and RCS will be a more attractive proposition to consumers than just voice on its own.
From a market perspective, TechNavio forecast the global VoLTE market to grow at a substantial compound annual growth rate of 300.4% over the period of 2012 to 2016. One of the key factors contributing to this market growth is the increasing demand for data services along with the sustained use of voice services.
VoLTE is a stepping stone for operators to offer a multitude of evolved services. Its general viability is too early to gauge but in markets where VoLTE is already available, it has been greatly successful. In fact, Infonetics predicts that the number of global VoLTE deployments will increase from four to 12 by years’ end, with eight million subscribers, about three-quarters of them in the Asia-Pacific region.
VoLTE will enable operators to optimally utilize their advanced networks and empower them to offer innovative telephony and data services to subscribers. Since not all operators are on board quite yet, there will be a gap for some period of time before all networks and devices are VoLTE-compatible and offer the same diversity of services and options that are available today. Operators are always looking at ways to protect their voice service revenues so it’s to their advantage to use a dedicated protocol like VoLTE rather than offer supplementary OTT VoIP solutions.
