With mobile subscriptions now surpassing the number of people on Earth, it’s safe to say the global mobile market is starting to saturate. Mobile operator revenues are under pressure as a result.
What’s more, over-the-top services are siphoning off revenue from telcos’ existing customer base. Ovum predicts that between 2013 and 2018, free IP services will eliminate $386 billion in revenue operators could previously have been expected to bill, leaving the world’s telecommunications carriers searching for new sources of growth.
With demographics no longer an engine of growth in the developed markets, user experience – enabled by “4G” technology – is the new battleground for retaining and attracting subscribers. For the average LTE user, a data-heavy Web surfing or video-watching experience can feel quite cutting-edge; but the voice call experience won’t be significantly better than what it was pre-smartphone. When it’s restricted to the 56 kilobits per second bandwidth allocated to voice calls on 2G and 3G services, the voice experience may actually be worse than what the average OTT provider can deliver free of charge.
Something must be done if telcos are to reverse their voice revenue declines. A 4G world needs a 4G voice experience and voice-over-LTE is now available to meet that need. VoLTE consistently outperforms both 2G and voice-over-IP services in mean opinion score. And it can be combined with other services, such as simultaneous file sharing, screen sharing, Web surfing, video watching and more. This makes modern voice calling a more engaging experience and one suited to the multitasking tastes of today’s subscribers. Roughly two dozen VoLTE deployments have occurred worldwide to date and 100 more are in the planning stages.
The benefits of VoLTE are clear:
- Revenue growth. VoLTE’s ability to combine with other services results in more data consumption. For example, Korean telco LG U-plus offers a VoLTE-infused service called Uwa. Users of the service consume three times the voice minutes, and two-and-a-half times the data, of non-Uwa users.
- Operational efficiency. VoLTE enables operators to start phasing out their legacy voice networks, eliminating the operational costs associated with maintenance, repair and physical plant.
- Accelerated 4G adoption. According to LG U-plus, VoLTE was an important migration factor for 44.7% of its subscribers who chose to upgrade to 4G subscriptions.
- Spectrum efficiency. VoLTE uses spectrum four times more efficiently than 3G does, freeing up space on the airwaves for services such as video. Today, video can account for up to 70% of a mobile operator’s traffic.
It is this last fact that makes video the single most important service an operator delivers. Moreover, user expectations for video quality are rising steadily. A September 2015 survey by Openwave Mobility, a company that helps operators monetize mobile traffic, showed one-third of respondents felt strongly that video buffering is simply unacceptable. More than half of unhappy respondents blamed operators, not video sites, for a poor mobile video experience.
This puts the onus on operators, rightly or wrongly, to address these problems. To be the connected lifestyle providers that carriers aspire to be, they must start designing their networks from the ground up with the user in mind. A seamless experience must constitute the very reason for the network’s existence rather than just being a happy coincidence.
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