VoLTE (voice over LTE) should see about 20 commercial deployments this year, according to the GSMA, and the slow trickle could become a flood from 2015.
However, the platform faces daunting challenges, not least the need to get it right first time, in a world where Skype and Google Voice lurk, and to deploy IMS (in many cases a hammer to crack a nut), not to mention the collapse of voice revenues in general.
But at its heart is the last hope for mobile carriers’ voice-based business – to integrate this into a broader, richer communications service that can be firmly differentiated from the web services and can form the basis of a developer ecosystem.
The challenges in its way are daunting however, for three main reasons – the technology itself; the power of the competition; and the decline of voice and messaging revenues overall.
The technology relies on having sufficient LTE coverage to minimize awkward fallback to 2G/3G; and on deploying an IMS (IP Multimedia Subsystem) core, such a significant undertaking that most mobile carriers are still holding off large-scale rollouts. The need for 4G voice, and simplified routes to IMS, including hosted services, will spur adoption this year but there are other technical barriers too.
VoLTE puts considerable strain on elements like Diameter signalling and roaming. Voice quality of service must be significantly higher than that of over-the-top services to encourage user uptake, but this entails investment in RAN functions to prioritize VoLTE packets over other classes of IP data and to schedule variable VoLTE packet sizes. One reason for operator delays in deploying the technology is to avoid delivering a service which is just ‘me-too’, or worse, is an inferior experience to that of 3G voice or Skype.
In addition, all this effort is being made in a market that is delivering a declining share of revenues – the ROI is so questionable that some greenfield LTE operators will remain data-only. But that is not so easy for existing MNOs, which still earn 50% or more of their revenues from voice in many markets. As of the end of 2013, seven countries, including Japan and the US, had seen mobile data revenues eclipse those from voice (in Japan, voice delivers only 30%). The main reasons have been changing user habit – communicating via messaging or social media rather than phone calls – and the competition from Skype and others.