The next challenge for VoLTE is to extend the business case beyond simple voice to something with better revenue and profitability potential.

Gabriel Brown, Principal Analyst, Heavy Reading

February 23, 2016

3 Min Read
Enhancing the VoLTE Business Case

At the start of this year there were 40 voice-over-LTE (VoLTE) deployments in service in 28 countries worldwide, up from 15 live deployments just ten months earlier, according to the Global Mobile Suppliers Association. And with more than 100 operators currently preparing for launch, VoLTE is now becoming a mainstream technology. Just last week, T-Mobile USA announced that more than 50% of its total voice traffic is now on VoLTE infrastructure.

It's fair to say that getting VoLTE to commercial readiness has been a hard-won battle. Two factors have helped enormously: (1) The availability of compatible handsets -- most notably, the first iPhones in 2014; and (2) the optimization of LTE radio networks for voice using SON technology. A third factor -- cloud -- will take operators through the next stage of development.

The challenge now is to extend the business case beyond what is a relatively simple -- and dare we say, mundane -- service from the customer perspective to something more exciting, with better revenue and profitability potential. To do this, there are three key areas operators need to address:

  • Maintain high-value 3G voice services. It is not a fashionable thing to say, but many operators have profitable, and often customized, voice services in the 3G core network. These include "mobile PBX" style services that use features such as short-codes, call forwarding, hunt groups and so on, and which remain important day-to-day for corporate VPN customers. The opportunity is to reuse these 3G services in LTE without having to rebuild these capabilities as native IMS apps through the use of SIP service chaining technology. The ability to stitch together multiple app servers to create an end-user service was always the promise of IMS; now is the time to make it happen.

  • Add new services beyond simple telephony (IR.94). A basic VoLTE service is all well and good, but uninspiring from a customer perspective and therefore also from an accountant's perspective. It is clearly not an easy task for a telco to re-invent telephony and communications given the pace of development and cost-base of online players. WhatsApp has trounced RCS, after all. Nevertheless, operators need to make the case to work with third-party partners and should double-down on what their network can offer in terms of performance (e.g. for HD video), reliability and so on. This won't be easy, but it is important to address.

  • Apply cloud principles to drive cloud economics. With voice revenue under pressure it's critical to have a low cost base. One of the benefits of a delayed VoLTE deployment is that operators now have a much clearer idea of how they can use virtualization and cloud to run the voice core, and can be much more confident in the technology and its reliability. There is still work to do of course, but operators should now think "cloud first" when it comes to mobile core investment. The performance, and reliability, of virtual network functions (from SBC to vIMS to TAS) is such that "carrier grade" VoLTE services can now be built on standard cloud servers. This model reduces the cost of deployment and makes it easier for operators and their customers to act on commercial opportunities as they occur.

The specific implementation of VoLTE will vary according to market and operator context, but these three principles, I believe, provide a framework to think about, and grow, VoLTE as a business.

This blog is sponsored by Metaswitch.

— Gabriel Brown, Senior Analyst, Heavy Reading

Read more about:

Omdia

About the Author(s)

Gabriel Brown

Principal Analyst, Heavy Reading

Gabriel leads mobile network research for Heavy Reading. His coverage includes system architecture, RAN, core, and service-layer platforms. Key research topics include 5G, open RAN, mobile core, and the application of cloud technologies to wireless networking.

Gabriel has more than 20 years’ experience as a mobile network analyst. Prior to joining Heavy Reading, he was chief analyst for Light Reading’s Insider research service; before that, he was editor of IP Wireline and Wireless Week at London's Euromoney Institutional Investor.

Subscribe and receive the latest news from the industry.
Join 62,000+ members. Yes it's completely free.

You May Also Like