We want to challenge mobile operators to deploy voice and messaging over 4G/ LTE, a critical decision facing mobile operators right now as we move to a 4G world!
Voice and Messaging over LTE
Why should mobile operators make voice and messaging a key part of 4G service offering today vs. a data only play followed by a voice play later?
Mobile operators are thinking about how to preserve their lucrative voice business but the competition is growing. There is a need to act quickly, for faster time to market.
Approximately, 3.6 percent of mobile devices with baseband connectivity are expected to be using 4G standards in 2014[1]. The new generation of data-centric mobile devices, such as Smartphones, netbooks, iPads and tablets, is already straining existing 3G networks. Integration of baseband solutions is expected to increase, resulting in an 11.0% CAGR of broadband-enabled mobile devices.
To effectively deploy 4G/LTE means combining voice and data together on an all-IP network.
The Business Case:
Cost: Currently, 2G, 2.5G and 3G networks separate voice and data, with voice carried on circuit-switched networks. Due to data demand on 3G networks, operators are faced with a balancing act between traditional services (Voice, SMS) and data. As a consequence the voice calls are dropping…but rapid 4G migration will resolve that.
4G (LTE and WiMAX) introduces one all-IP network, a single pipe to handle all mobile services – Voice, Video, Messaging and Data. This makes the network more efficient to operate. Industry estimates a 3x cost savings over 3G!
It is cheaper to carry voice or data over 4G, so rapid transition will save money. As Verizon noted in a recent press release “the cost of transmitting one megabyte of data over its LTE network would be one half to one-third the cost of transmitting the same data over its 3G network.”
Competition:
The impending threats to mainstream mobile operators are the numerous new technology solutions that are rapidly evolving, such as Skype, Google, or Apple. The market has seen integration of over-the-top services on devices such as Android with a taste of VoIP and services such as Google Voice or Skype and iPhone 4G offering real-time video services – as a result subscribers now demand/expect both. Easier, better, cheaper!!
Some mobile operators are starting to leverage 4G (LTE and WiMAX) as enhancements to the 3G infrastructure, relieving the traffic load on 3G mobile broadband networks. But it may not be fast enough or big enough and still, many others haven’t taken the leap.
From the consumer’s perspective, a bigger and fatter pipe means more access to content and more applications including interactive voice services and social networking to HD-quality video to the laptop, iPad or whatever device. Demand is growing, who will be there to grab it?
The demand is growing faster than traditional mobile operators can respond. The door is wide open for new players to come in and diminish the value of the mobile operator as a services provider. Data traffic is exploding and will continue to grow exponentially as Smartphones evolve so there’s some urgency in freeing up inefficient spectrum from 2G and transitioning voice to 4G.
Therefore, time to market and time to market share are critical.
What’s the hesitation?
Now, many mobile operators are making plans to deploy 4G but with a rollout that consists of data first then voice….how unrealistic!
- Consumers select services such as Skype, etc when they see a clear value proposition. Why settle for lesser services AND continue to pay a premium? Why accept expensive 2G Voice services when 3G and soon, 4G/LTE will enable seamless VoIP? Why not jump on one of the new emerging VoIP applications?
- Smartphone-based data traffic is growing so freeing up inefficient spectrum away from 2G should be a key strategy, starting by transitioning voice to 4G.
- Maybe Operators think that 4G will be spotty and users will be forced to buy 2G/3G anyways. They hesitate but when 4G improves, users will migrate to service providers with better features/value, where web providers have a head start. Loyalty is not a factor.
- Operators add value today – $1 Trillion worth of services offered, dominated by voice and messaging, which can be leveraged with 4G. Global interoperability and universal user identity of phone number are capabilities that operators can continue to monetize. Control of the pipe also gives operators an opportunity to monetize mobility, which web providers will not be able to offer. New technology such as RCS is an opportunity for new services and new pricing schemes, based on usage. People are prepared to pay for speed or to be bandwidth hogs, or access applications, etc.
- Finally, operators can continue to monetize the value of service level guarantees and customer support – an area not addressed by majority of the over-the-top providers.
What is the technology solution?
The movement towards the ‘One Voice’ initiative (a jointly developed technical profile for LTE voice and SMS services) provides the much-needed roadmap, defining an optimal set of existing 3GPP-specified functionalities that all industry stakeholders, including network vendors, service providers and handset manufacturers, can use to offer compatible LTE voice solutions. This means clarity of direction but fewer options in LTE for vendors to differentiate themselves.
An IP Multimedia Subsystem (IMS) based solution meets consumers’ expectations for service quality, reliability and availability when moving from existing circuit-switched telephony services to IP-based 4G services. This approach will also open the path to service convergence, as IMS is able to simultaneously serve broadband wireline and 4G/LTE wireless networks.
Although IMS is planned for many operators, and it is available, many operators dread the complex execution of deployment. However, IMS is extremely important to an overall 4G services and network transformation strategy to bring converged services to market. Operators should explore simple execution options rather than wait on the sidelines and miss the game entirely.
SUMMARY: …quick action will be rewarded
- Voice and Messaging drive today’s mobile revenue and will remain dominant (>80%) despite 4G/LTE and revenue preservation is crucial. Mobile operators can offer their subscribers Voice over an all IP 4G network.
- Google Voice, Skype are ready to offer differentiating services. In the open ecosystem of application development (iPhone, Android, etc.), operators need to have open voice enablers to attract and accelerate 3rd party application developers to deliver voice (and messaging) based services i.e. Google voice now offers one phone ring for all phones.
- Transformation of 2G, 2.5G and 3G networks that carry voice on circuit-switched networks to all IP 4G networks will realize cost advantages and recover inefficient spectrum for additional data capacity.
- Mobile operators can leverage key values of service ubiquity, access mobility, global interoperability and universal user identity of phone number into 4G to enable continued monetization of voice and messaging.
See Mavenir’s Solution at:
[1] In-Stat
Posted on July 2, 2010 by MVT
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