Earlier this month I came back from the LTE Voice Summit and one of the interesting points many service providers presented was their hopes from VoLTE.
Rightfully there was a consensus that VoLTE will not be a revenue growth generator… Customer retention? Maybe.
Except for one vendor that built a full-blown business model for the service providers showing how they shall increase their revenue by charging premium for video calls I didn’t hear much said about that. To this, my comment to the speaker was that the model has no merit; consumers will not pay extra for video calls, they can do them at good enough quality for free today. Moreover, service providers that already launched VoLTE and support video calls over LTE are not charging extra for those calls.
In many presentations the expectation for revenue came from other services, many based on RCS.
Problem is, launching such services with business models that charges for communication minutes or subscriptions will not help service providers in their battle with the Asymmetric Business Models of the OTTs.
The benefits of VoLTE
If increase in revenue is not something service providers are counting on VoLTE for, what are their hopes from VoLTE?
A detailed list was presented by Divya Wakankar from bics. Here they are.
Operator Benefits
- 40% Spectrum efficiency
- Network efficiency
- Reduced Opex
Enhanced User Experience
- Faster Call Set-up time
- Better Call Quality – HD Voice
- Simultaneous Voice & Data sessions
- Potential combination with Rich Multi Media services (RCS)
- Improved battery life
- Toggle to Video calling
- Multi-party conferencing
Compete with OTT services
- Counteract to reduce shift of revenue to OTTs
- Enable regional OTTs to offer digital services
Here is my view, what is yours?
VoLTE does bring value to the operator from operations perspective, I wrote about that in the past and therefore will focus on user experience only.
For their battle with OTT – A tool for customer retention, not enough but one that is required due to the benefits mentioned below.
User experience
I believe too much was said in the conference about call setup time. It is nice but not a killer thing to my view as a user.
If I had to pick the top 2 benefits they would be:
Better quality – I don’t mean only HD voice, I also relate to the fact that the network is built for real-time communication. Even if the other party is not on a VoLTE network, in some cases quality will be better assuming the other party is on a reliable network (wireline). A complicated topic I wrote about and was the theme of my presentation at the conference.
Longer battery life – Assuming you have a smartphone no need to elaborate
And if you would give me the chance to list a third one, lower in value than the other 2 above, it would be…
Integration of voice and video – This one is third on the list because it can be done with OTT and will have value only once VoLTE is ubiquitous. I believe people will continue to make calls using the service providers for the coming years until a low cost, data only service provider will come along. Since most packages are flat rate, as long as I don’t call long distance no point for me to turn over to OTT (and each time to the OTT my friend is on). Given this, I will be able to easily upgrade voice call to video.
What are your 2+1 picks or maybe you have some other ideas not on the list?
Hi Amir, how are you?
I was in the same event too and I agree, in general, with your comments.
However, there are more ” subtle” / “internal” aspects when we talk about VoLTE.
The presentation made by SK Telecom was clear: ” We launched VoLTE with HD Voice and 76 VAS services” (!!)
So, no questions that VoLTE is much more than only VOICE itself…it’s an enabler and, in my opinion, an “enabler for others enablers”.
In this way, we (operators) needs to be creative, innovative and think different when consider the overal VoLTE infra and its “indirect”gains and new things that will be implemented naturally….. this is the main challenger for many operators: think different and innovative.
Let’s try to pass through some points that you highligthed as potential benefits of VoLTE and try to see “where is the money” (directly and/or indirectly):
40% Spectrum efficiency -> Use the remain spectrum for explore new digital services (ie.: M2M, IoT, Video services, Mobile Ads, MVNO etc)
Network efficiency/Reduced Opex -> Launching the IMS Core based on NFV (combined with SDN) new ways of “efficency” and service delivery can arise….
Enhanced User Experience,Faster Call Set-up time, Better Call Quality, HD Voice -> Higienic conditions. Why not exposure this new experience for others? (ie.: OTTs)
Simultaneous Voice & Data sessions -> More Data Bundle usage.
Potential combination with Rich Multi Media services (RCS)-> Opportunity for Innovation;
Improved battery life-> More Data Bundle usage.
Toggle to Video calling -> Video will usage more Data from the bundle (as you saw some operators are charging video in terms of MB instead of MoU, right?)
Multi-party conferencing -> others opportunities for exposure.
So, there are opportunites….but it’s not “plug & play”…is necessary hard work on them.
Good Luck,
Robson
Robson,
Thanks for this detailed comment.
I agree service providers should innovate and launch new services. This was discussed on Oct 23rd in this Webinar https://attendee.gotowebinar.com/register/5051075414841550849.
These new services are not limited to VoLTE only and that was my point, they can be launched even if VoLTE wasn’t launched yet. Also the services of SKT are compatible to 3G as said in that presentation.
Since VoLTE is voice, video and SMS over IMS/LTE charging extra for these services is hard. Therefore revenue should come from other services and sources.
Amir