Telecom analysts are speculating that there is no strong business case for VoLTE (Voice over LTE) for mobile operators.
Interestingly, U.K. telecom operator EE last week announced plans to launch VoLTE in early 2015 and HD Voice-over-Wi-Fi (VoWi-Fi) services in late 2014.
Slow growth for VoLTE
Since there is no strong business case for the overall 4G, recently Reliance Jio Infocomm puts its LTE launch plan to 2015 after getting the license in 2010. Indian telecoms Bharti Airtel is yet to find growth in its 4G subscriber base. VoLTE will be a distant dream in India.
The growth of VoLTE, a much discussed technology in the 4G era, reflects the poor business case for mobile operators.
Infonetics says the number of VoLTE commercial services launched to date reached 8 in June 2014 from 4 last year, and 3 in South Korea in 2012.
“Dubbing VoLTE as HD voice is misleading because there are already 100 high-definition (HD) voice networks running on HSPA around the world. Africa has the best HD voice networks,” said Stephane Teral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.
In the over-the-top mobile VoIP market, Japan-based Line has topped Skype as the market leader, capturing roughly a quarter of worldwide active users in 2013.
“Line’s been able to think outside the traditional voice box, offering paid services through application add ons like games and stickers that not only create a revenue stream, but also increase usage of core services,” said Diane Myers, co-author of the report and Infonetics’ principal analyst for VoIP, UC, and IMS.
South Korea, the innovation hub for LTE, is the home for VoLTE. There were 12 million VoLTE subscribers worldwide in 2013, mostly in South Korea.
The telecom market expects an additional 30 commercial VoLTE networks to launch and VoLTE subscribers to increase to 51 million this year.
In 2013, there were 1.5 billion mobile VoIP (mVoIP) subscribers worldwide, the bulk via over the-top (OTT) applications.
The majority of OTT mVoIP application usage continues to be dominated by Asia Pacific after a shift in 2012; the region boasts a mobile broadband penetration rate of over 100 percent.
The use of OTT mVoIP is skyrocketing in China, South Korea, Japan, India, and Indonesia.
Despite a 12 percent 2013–2018 CAGR for OTT mVoIP service revenue, most providers in this space are making very little money per user. This is an unsustainable business for many independent companies, said Infonetics.
Different views on VoLTE
Analysys Mason last week said telecom operator IP voice services will account for 25.6 billion minutes of voice calls in the U.K. in 2018. The report said this will be 20.2 percent of all voice calls carried by mobile operators in the U.K.
“It is important that operators move to IP voice, which includes both VoLTE and and VoWi-Fi, to control costs, differentiate against OTT voice services such as Skype, and it improves the voice experience – EE is aiming to get their dropped call rate (DCR) below 0.5 percent nationally,” said Martin Scott, practice head for Analysys Mason’s Consumer Services research practice.
Nokia Networks on Thursday announced the Kuwait-first VoLTE call using Zain’s commercial LTE network.
Omar Saud Al Omar, chief executive officer of Zain Kuwait, said: “Today’s VoLTE success is an important milestone in our planning for the future, which will translate into providing enhanced mobile broadband services to our customers across Kuwait, offering them an opportunity to enjoy unparalleled quality.”
Nokia Networks says VoLTE technology enables better voice calls, faster data services and more efficient use of network resources. Since VoLTE enables network simplification, it reduces operating costs for operators.
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