Will voice-over-LTE revive revenue as Indian telecos faces dip in 2G voice?

Telecom Lead India: Indian mobile service providers are yet to consider voice-over-LTE to revive their revenue streams.

Mobile User (source: resources1.news.com.au)

Only Bharti Airtel has launched 4G services in India.

Reliance Industries-owned Infotel Broadband is likely to kick off TD-LTE with voice in 2013. RIL is likely to bid for 2G spectrum as well to become an integrated telecom service provider.

Aircel is also contemplating 4G soon.

Tikona Digital may spend around $200 million as Capex for TD-LTE services shortly.

Vo-LTE will be very crucial for telecom service providers as global operators are facing dip in voice revenues.

Industry analysts said Vo-LTE can be the game changer in India considering the fact that Airtel booked less than 5,000 TD-LTE customers since launching services in two circles in April 2012. Operators will also be forced to look at new business strategies.

Reliance Industries, perhaps, is following the right model – they want to launch the most cost effective dongles and LTE handsets available in the industry. LTE gadgets will become the single stop solution for all communication and entertainment needs.

Vo-LTE is significant as ARPU in India has already taken a beating ever since domestic telecom service provider started expanding to rural areas and facing cut throat competition.

For instance, Bharti Airtel said its ARPU from mobile services and data services in India reduced by 3 percent and 10 percent, respectively, in the first quarter of fiscal 2012-13. Mobile services ARPU decreased 3 percent to Rs 185 in first quarter ended June 30 2012 from Rs 190 in the same quarter previous fiscal. Mobile data ARPU declined 10 percent to Rs 40 from Rs 44.

India needs Vo-LTE because in the Asia Pacific region, in the second quarter of 2012, minutes of use declined 7.36 percent. The dip in voice traffic in Africa was 6.3 percent, Western Europe (2.32 percent), and North America (2.12 percent).

Minutes of voice grew 8.5 percent in the Middle East and 5.87 percent in Latin America.

LTE does not just transform the delivery of broadband data, it also can enrich voice services, according to ABI Research.

SK Telecom, LG U+ in South Korea and MetroPCS Communications have already introduced voice over LTE.

ABI Research said Messages Sent is keeping stable in Q2 2012 compared to last quarter, with Q-on-Q increase rate of 0.16 percent in Asia Pacific, 0.14 percent in North America, 0.18 percent in Western Europe.

13.4 Exabytes of mobile data traffic is likely to be consumed through 2012, while over the forecast period the mobile data traffic could potentially reach 110 Exabytes by 2017, with a CAGR over the 2012-2017 of 53.4 percent.

Overall global 4G traffic has a CAGR of 147.5 percent, compared to 3G traffic which has a CAGR of only 69.6 percent.

Mobile operators are also increasingly coming under pressure to improve mobile telecom service profit margins as well as bring in new services to counter the competition from Over the Top (OTT) services such as Skype, Viber, Whatsapp, and FaceTime. Mobile operators have had limited options with 3G but 4G LTE should give the mobile operators some new tools.


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