Mobile network operators across the globe are moving to deploying VoLTE (Voice over LTE) systems. The reasons for this are as expected. They include:
- Better voice quality
- Protect voice revenues
- Leverage IMS investment
- Be able to provide billing services (Leverage their billing system)
- Migrate 2G and 3G voice services to LTE
However, given the successes of over-the-top (OTT) services over wired broadband and in current wireless networks is this billion dollar investment prudent? Consider the following:
- OTT has won, or is winning, the battles. Skype and Netflix are two good examples. WhatsApp is another case in point of OTT success.
- OTT services are “good enough”. The majority of the market is unwilling to pay for QoS when a free, or near free, service is sufficient.
- When a consumer experiences poor quality for an OTT service they blame the service provider and not the OTT provider.
- QoS can only be guarantee when the “call” is completely on-net. As soon as the voice call leaves the originating SP all bets are off. Why spend the $ billions only for a subset of calls?
- Voice revenue and now SMS Text revenues are crashing. Why spend $ billions to chase a losing battle?
- Service providers are moving away from call-based billing (i.e., CDRs (Call Detail Records)). Although the NSA loves them. Unlimited calls and texts are the norm.
- Data limits are prevalent. A few Youtube videos or one Netflix movie will dwarf a month’s worth of phone calls from a data usage perspective.
- When Google deploys their fiber optic networks (e.g., Kansas City) they do not offer voice services. The reason is to avoid the mountains of regulations required when offering voice services. Does that mean people in Kansas City don’t make voice calls?
It is understandable why a service provider with decades of legacy voice experience would want to consider VoLTE. After all, they have decades of legacy voice experience. Similarly, it’s not surprising that service providers that have spent $ billions and years deploying and perfecting IMS want to leverage that investment in time, money and careers. It’s difficult to face reality that IMS is a “sunk cost” and therefore should not be factored in when evaluating VoLTE investments.
The OTT trends and successes cannot be refuted. Service providers continue to face the fact that they cannot compete effectively against every segment of OTT services. The $ billions they would spend on VoLTE would be better spent on:
- Increasing bandwidth per subscriber
- Providing industry leading network security to protect their subscribers
- Fighting the short sighted Net-Neutrality laws that make regulators “feel good” at the expense of long term viable markets.
- Creating an infrastructure where OTT’s want to pay them for QoS in a fair, open and non-discriminatory manner.
I’ve spent 20 years working on technologies with the goal to ensure service providers do not become a “dumb pipe”1. I am fully biased toward ensure the success of SPs and believe that “net neutrality” is unfair to them2. However, SPs should not spend $ billions on VoLTE just because it’s voice. High speed, high quality broadband is the future. Don’t fight it.
To discuss this please contact me at email@example.com
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