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Mobile Voice is Dead. Long Live Mobile Voice!

Tim Kridel | Contributing Analyst
Heavy Lifting Analyst Notes
Tim Kridel | Contributing Analyst

Like pundits and entrepreneurs such as Bob Egan and Jeff Pulver, I wound up in telecom by dabbling in ham radio as a teenager. Those experiences were good introductions to radio frequency (RF) engineering, the FCC, and other mobile basics. But talking with people halfway around the world as propagation waxed and waned wasn't enough to prepare me for cellular's frequently abysmal call quality.

Sure, PCS eliminated analog cellular gremlins, such as static and crosstalk. But as anyone who's felt the need to say "Roger that!" or "Over!" can attest, there's still a lot to be desired. If there weren't, EE wouldn't be spending £275 million (US$447 million) next year to improve call quality, and Sprint wouldn't be crowing about 60 Mbit/s and HD Voice in the same breath, to name just two recent examples of how operators are looking to breathe new life into mobile's original killer app.

What's the business case? Part of it is research showing that when calls sound better, people talk up longer -- 45% more, in some cases. The more they talk, the more they spend on a service that's already one of the most profitable for mobile operators. That's one key finding from the new Heavy Reading 4G/LTE Insider , "Mobile Call Quality: Does Better Really Matter?."

It also helps that HD Voice is an incremental expense because it leverages what operators are already spending to deploy VoLTE. "Operators get HD Voice pretty much as a freebie," Qualcomm says.

HD Voice is currently available from more than 83 mobile networks in 61 countries, so there's no shortage of real-world research to see if the improvement is noticeable enough to influence purchasing decisions. Orange, for example, surveyed its HD Voice customers, and 86% said it will be a criterion for their next purchase, and 76% are ready to buy a new phone to get HD Voice. The final stat shows why handset vendors should take HD Voice seriously.

But can operators charge more for HD Voice? Probably not. As one infrastructure vendor put it: "One thing that seems to be pretty clear, and what I've been seeing in my discussions with them, is that they're not going to be able to charge a premium for HD Voice. They're going to have to use this as differentiation: 'Besides providing the best data network in the country, we also provide clearer calls' or 'the best voice experience.'"

That differentiation will wane because the more operators that roll out HD Voice in a given market, the more it becomes table stakes. But it doesn't necessarily undermine the long-term business case for HD Voice and other call-quality improvements. For example, they enable better-sounding ringback tones and gaming, which could help increase revenue from those services. Improved call quality also could increase revenue by spurring additional wireline displacement in both the consumer and enterprise markets. In today's hyper-competitive mobile market, few operators will turn their back on any source of incremental revenue.

— Tim Kridel, Contributing Analyst, Heavy Reading 4G/LTE Insider

This report," Mobile Call Quality: Does Better Really Matter?," is available as part of an annual subscription (6 issues per year) to Heavy Reading 4G/LTE Insider, priced at $1,595. Individual reports are available for $900. To subscribe, please visit: www.heavyreading.com/4glte.

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12/30/2013 | 8:45:45 AM
More VoLTE debate
Here's some more debate on the VoLTE issue....

Sarah Thomas
Sarah Thomas
12/19/2013 | 2:54:35 PM
Free HD voice
Interesting post, Tim. I definitely think operators can charge for HD voice. They weren't giving a discount when it was crappy! How long do you think it'll be before we see the full benefit of it (at the handset and network level) in the US? Sprint is saying mid-next year, but that seems ambitious.
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