There’s no harm in taking a slow road to VoLTE deployment

OVUM VIEW

Summary

Mobile operators preparing to roll out LTE don’t need to hurry to deploy voice over LTE (VoLTE). There are still service and supply issues to be worked out, and time (and the effort of others) will solve most of these. In the meantime, VoLTE won’t deliver any compelling services, revenue opportunities, or business opportunities. While VoLTE will enable network efficiency and cost savings in the long term, in the short term, operators should continue to focus on data services.

Sooner or later every operator will deploy voice telephony on LTE

For most operators, the eventual deployment of LTE is a foregone conclusion. While issues remain around determining exactly when to launch LTE, deciding not to roll out the technology at all is a niche position that few operators in competitive markets will take. A similar logic applies to providing voice services on LTE. Being a data-only operator or providing customers with telephony via an over-the-top (OTT) service (either in-house or on a BYO basis) is again a niche position that few operators will take.

Even the route towards rolling out voice on LTE is well mapped out. While there are some questions about how to provide voice services during the interim period when the LTE network sits alongside legacy 3G and even 2G networks, there is general agreement that the ultimate destination is a solution based on the IP Multimedia Subsystem, which is now designated as VoLTE – “voice over LTE”.

Getting the timing right for VoLTE is less obvious

As with LTE, some operators will find reasons to launch VoLTE services early. The drivers of an early VoLTE deployment include:

  • network efficiencies
  • VoLTE eliminating the need for a separate voice network, and the promises of spectral efficiency that further reduces the cost of transporting voice
  • quality benefits, especially in terms of call setup time compared to UMTS
  • the possibility of new services, where HD voice, simultaneous voice and data usage, and Rich Communication Suite (RCS) services are most often cited.

However, other operators will find reasons to hang back and not get ahead of the pack. They cite a host of service parity issues, including issues with support for emergency calls and in-call handover between LTE and other networks. They also point to problems with devices, including the insufficient availability of devices that support VoLTE and unresolved issues about device performance (most notably battery drain).

Ovum prefers the second strategy, and believes that it will be the second mouse that gets the cheese, rather than the early bird that gets the worm. We believe that the opportunity to gain first-mover advantage is outweighed by the potential teething problems that the technology could face. As with every other launch of a new network technology, there will be issues with the availability of suitable devices. The service parity issues, and in particular the questions around handover, also seem to be substantial.

There is no sign of new services or charging models for VoLTE

The service benefits of VoLTE also appear to be tenuous. Even if RCS services were a sure-fire winner (and this is by no means an established certainty), their deployment is largely unrelated to LTE, as the few commercial deployments to date largely demonstrate. It is a similar situation with HD voice, which can be deployed on both LTE and non-LTE networks.

Nor is there a straightforward relationship between VoLTE and new charging models for voice. Although some mobile operators are beginning to either feel or anticipate pressure from OTT VoIP services, VoLTE in itself neither facilitates nor requires a new kind of charging model. It is designed to support all of the recording, charging, and billing mechanisms that apply in traditional telephony. Operators can choose to implement a different set of billing principles (including “unlimited voice”), but they can do this independently of LTE.

For all these reasons, our advice to operators is to stay engaged with VoLTE but to not rush to deploy. Ovum believes that if operators can afford to wait, they should. Operators that can’t afford to wait should do what they can to avoid any problems by making detailed plans for device acquisition and workarounds for any service parity shortcomings. Operators should continue to sell LTE on its very real benefits in terms of data services, rather than on the shaky potential benefits provided by voice services. The real benefit of offering voice on the LTE network is that it allows for more efficient operation and thus reduced opex, but that is not something that customers want or need to hear about.

APPENDIX

Author

Jeremy Green, Principal Analyst, Telco Strategy

jeremy.green@ovum.com

Sara Kaufman, Analyst, Telco Strategy

sara.kaufman@ovum.com

Nicole McCormick, Senior Analyst, Telco Strategy

nicole.mccormick@ovum.com

Further reading

Future Strategies for VoLTE Deployment (TE011-001193, February 2013)

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