VoLTE – Timing the opportunity

SIP Unplugged Blogs (Jun 13 2011) Femtocell , Over the top , VoLTE & 4G voice , Insider Insight

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   4G LTE opens the door wide for new voice business models. On one hand, the Over the Top (OTT) VoIP players (such as Skype) and messaging players (such as Apple iMessage) will drive innovative user experiences. On the other hand, mobile operators will drive to provide voice reliability, quality and consistency across 2G, 3G and now LTE networks.
   
   The race is on, especially in the U.S, and as in any race, the early players will set the course determining how the services and applications environment will evolve.
   
   It is a good thing. These emerging 4G LTE advanced networks will be using SIP/IMS based network architectures that enable a host of new services and possibilities beyond basic voice.
   
   Of these new services, the big one is referred to as ‘VoLTE’ or ‘Voice and SMS over LTE’.   When 4G LTE launches, that means that voice and SMS messaging can be delivered over a SIP/IMS network. And THAT means that providers no longer need to rely on traditional circuit switched voice calling, reducing cost in the mobile operators’ network operations while at the same time, opening the door for video and multimedia services such as RCS, RCS-e or Converged IP Messaging (CPM).  A new term V2oLTE (V-squared) is emerging, joining Voice and Video simultaneously in context of a high bandwidth, low latency LTE pipe. This strategy is being touted by leaders like Verizon who clearly see a value in offering a richer user experience around their planned VoLTE launch. 
   
   Over the Top players are also making moves in the race. Evidence of this is already visible with Google Voice being integrated in Sprint handsets and with Microsoft’s purchase of Skype as an entry into the voice (and video) market, with the premium value of the voice community being defined by the latter deal. Interestingly, some of these services such as Apple FaceTime and Skype are introducing SIP interfaces in anticipation to inter-operate with the operator services

   The opportunity for mobile operators is to offer better services to retain lucrative voice/messaging/data revenues. Here’s why: The current OTT players have conditioned mobile subscribers to use the unlimited data plans & Wi-Fi for chats, calls and video calls, which do not impact valuable voice or SMS revenues. Data plans are now being tiered as mobile operators need to find ways to derive revenues from massive flows of data. With VoLTE, operators can offer quality voice and SMS services, integrate them with other new mobile cloud services and deliver that at a lower cost to subscribers via bundling. However, with IP-based voice becoming mainstream, there is a possibility that mobile operators could lose the ‘native dialer’. This scenario must be avoided. So, all signs point to fast implementation and roll out of VoLTE.

   The opportunity for OTT players is the reverse. They could offer IP-based voice so users access minutes from their unlimited Voice/SMS plan instead of the more expensive data plan. They have succeeded in changing the mindset of subscribers to where many expect services for free. There is a possibility that they could corner the voice market, as services are viewed to be adequate and subscriber loyalty seems non-existent. However providing a reliable service vs. an application is fundamentally different from a cost and value perspective. It is yet to be seen how loyalty will exist in a “best-effort” application.

   The arrival of VoLTE and the new 4G mobile handsets presents opportunities for mobile operators to embrace Mobile Cloud Services to really differentiate themselves against OTT players. But, mobile operators can offer a range of new and/or bundled services whereas OTT players are limited to voice/data. We at Mavenir, believe that operators can develop new services for the new 4G LTE markets and the new uses for mobile handsets while retaining critical factors such as primary voice interface.

   Timing is everything.

   Shubh Agarwal brings more than 20 years of wireless telecommunications experience to his role as VP, Marketing, leading product management and marketing for new innovations at Mavenir Systems. Previously, he served as Senior Business Development Manager of Broadband Wireless Applications for Siemens Communications, now Nokia Siemens Networks. Prior to that, Agarwal spent 10 years at Nortel and worked in four countries, serving customers and developing new market entrance strategies. Leading various customer engagements at Nortel, he defined and introduced new access, core network and packet data network solutions for wireless service providers. Agarwal was educated at Rutgers University, where he earned his Bachelor of Science and Master of Science degrees in electrical engineering with High Honors. He holds an Executive MBA from Emory University.

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