VoLTE service revenues to reach $2 billion by 2016
Carriers worldwide are seeking ways to fight the decline of their primary revenue stream - voice services. Voice over LTE (VoLTE) offers a potential solution.
London, 20 June 2012 - Carriers worldwide are seeking ways to improve the efficiency and capacity of their networks while minimizing costs and improving the end-user experience, while at the same time fighting the decline of their primary revenue stream - voice services. Voice over LTE (VoLTE) offers a potential solution, and in a recently published report, London-based research firm ARCchart, expects that revenue from VoLTE services will reach $2 billion by 2016.
VoLTE was first introduced in 2010 by the GSM Association (GSMA), and has been standardized by the 3GPP. Without VoLTE, carriers use their LTE network solely for IP data transmission and are forced to use their legacy 2G/3G infrastructure for voice communications. Essentially, VoLTE voice enables LTE and allows concurrent usage of both voice and data on the same network. Not only does VoLTE offer unique advantages in lowering a carrier’s voice infrastructure economics, but it also promises to improve voice quality, device battery life and user experience.
Concurrent access of voice and data services over a single radio interface is of particular interest to CDMA carriers because unlike WCDMA/GSM, the CDMA standard does not support Circuit Switched Fallback (CSFB) technology. LTE subscribers on CDMA carriers are forced to concurrently use their LTE and CDMA radio interfaces, which drains battery life. As a result, CDMA operators will be early entrants to the VoLTE market.
According to the report’s lead analyst, Asad Khan, “Demand for VoLTE is being fuelled by carriers wanting to establish a native mobile VoIP solution, both for the long term economic benefits and to defend against the threat posed by OTT (Over the Top) VoIP providers such as Skype, FaceTime and Viber.”
Before the commercial launch of VoLTE services, several hurdles must be overcome. The availability of VoLTE enabled handsets will be a critical success factor in its widespread adoption. ARCchart forecasts that the number of devices supporting VoLTE will ramp significantly over the coming years, spurred by aggressive competition against OTT providers. However, ARCchart does not expect VoLTE will substantially stem the flow of voice traffic from carrier networks to OTT voice services, mainly because these OTT services are free of charge. Khan points out that “even if carriers impose restrictions on their subscribers’ OTT usage, migration of voice traffic will continue because as much as 70% of OTT traffic is over Wi-Fi.”
For more information on the report, visit: http://www.arcchart.com/reports/voice-over-lte-volte-report.asp?ref=pr
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