Voice over LTE matters to operators

Last updated: 20 March 2014

We have previously blogged about the challenges that LTE still faces, despite the general agreement being that LTE provides a great opportunity for operators. At the same event, the recent LTE Conference in Barcelona, as well as seeing the challenges, we also saw one key theme emerging that can demonstrate just how important LTE is to operators. Namely its role in enabling IMS / VoLTE (IP Multimedia Subsystem / Voice Over LTE).

Let’s break this down a little. Firstly, IMS is enjoying a clear revival, despite reports last year demurring on whether it was being revived or dying a slow death. Operators and vendors are launching IMS by either adapting their existing infrastructure (from the fixed network) or by launching new networks. There are two major drivers behind this:

The rise of VoLTE
Operators are keen to establish a native mobile VoIP solution (i.e. VoLTE) as 2G/3G becomes more and more expensive to operate. Network equipment vendors will increasingly phase out their products, pushing operators to use VoIP solutions. Secondly, VoLTE offers an alternative to the threats posed by OTT (Over the Top) VoIP providers such as Skype. Another way for operators to position themselves as an alternative to Skype and other OTT providers is by bundling voice with data in tariff offers.

Data monetization by partnering with OTT players
IMS is considered by operators to be a good opportunity to offer value to the OTT providers with revenue sharing and data monetization for multiple reasons. With IMS, OTT players would be able to bill the end-user, deliver premium services with QoS capabilities and have an interoperable and standardized application platform. It allows operators to position themselves as the man in the middle to monetize their LTE investment and subscriber management/relationship. By drawing on IMS, operators can go to market faster, grow their market penetration (as well in embedding OTT apps in branded phones), bill end-users, deliver premium services and integrate advanced features delivered by RCS (Rich Communication Services) such as today’s video games that run over voice calls.

Given research claiming that VoLTE service revenues are set to reach $2 billion by 2016, it is clear that there is both demand and the potential for supply, as long as the operators can actually operate.