AT&T said this week that it expects to have a voice-over-LTE (VoLTE) smartphone by the holidays, and Verizon has also said that it will launch a VoLTE phone this year. Analysts say the move to VoLTE will be gradual, and will definitely benefit some players more than others.
Verizon vs. AT&T: The GSM advantage
Verizon Wireless and AT&T Mobility have both said they will turn on VoLTE during 2014, but AT&T has an advantage as a GSM carrier. “A 3GPP carrier like AT&T or T-Mobile can implement VoLTE market by market and it will play well with circuit switched voice,” said Roger Entner, lead analyst at Recon Analytics. “If you are a legacy CDMA provider you have to wait until your entire footprint is LTE before you can do VoLTE.” VoLTE is not backwards-compatible with CDMA, so a VoLTE call will drop if a Verizon subscriber loses an LTE connection.
But Verizon Wireless is getting close to the LTE coverage it needs to achieve in order to turn on VoLTE. The carrier is expected to roll out a number of heavily subsidized VoLTE handsets in 2014.
Squeezing more out of spectrum
Many carriers find that data transmission is already consuming as much as 85% of their spectrum, meaning that the spectrum left over for voice transmission needs to be used as efficiently as possible.
“As we move to VoLTE carriers can realize 30-40% more spectral efficiency compared to 3G,” said Entner. “That is a welcome recovery of valuable spectrum that was lost when we went from 2G to 3G, where we have created a standard that was less voice efficient.” Entner explains that VoLTE requires less call set-up data than 3G, leaving more spectrum that can be used for actual data transmission.
VoLTE takes advantage of the multiple antennas used at the transmitter and the receiver in an LTE connection. “The great thing about LTE is you’re using MIMO, and with MIMO you’ve created separate channels so you’re getting this improvement, effectively creating a new channel,” said John Hoadley, CTO for wireless at Taqua. “You’re getting more bits through in a given amount of spectrum just in terms of spatial multi-plexing.”
But Hoadley believes that carriers may see limited impact from VoLTE when it comes to the rate at which they can transmit voice, because the spectrum available for voice calls is in decline. “It probably would be generous to say that voice is 15% of the bits that are going through wireless networks now, and that’s decreasing every quarter,” said Hoadley. “So I think carriers will challenged, because you’re getting a 30% improvement, but only for about 15% of your bits.”
Not all spectrum is created equal
Carriers who invested in 700MHz and 800MHz spectrum will see big payoffs with VoLTE, according to Hoadley. “If you get bands like that, you’re going to have spectacular coverage in-building and you’ll have excellent ability to deliver VoLTE through your entire market,” he said. “The other folks who are having to live at 1800 or 2600 or AWS spectrum, and that’s the only bands they have, in areas where they don’t have a super high density of cells, they’re going to have challenges. So not every carrier is created equal.”
Carriers vs. OTT: voice as data
On an LTE network, voice will be treated as data, making VoLTE calls similar to VoIP calls. That could be bad news for current “over-the-top” voice and video providers offering service over mobile networks.
“The business model will have a major reverse disruptive effect on those over-the-top Internet players that have for years been pounding on the carriers,” said Shahid Ahmed, network practice lead for Accenture in North America. “I think it will enable the carriers to really go head-to-head against all these over-the-top players that we’ve been seeing over the last two or three years .. whether its WhatsApp or variants of Skype that are out there.”
Not only will VoLTE help carriers compete with OTT players; it will also create new opportunities for innovation. “As voice becomes a data application it opens up opportunities to integrate voice in a greater way than ever before,” said Roger Entner. “In the same way that smartphones and 3G data have unleashed the application revolution and creative juices got flowing here, I think we will see another wave of innovation coming where voice becomes much more seamlessly integrated into applications than ever before.”
Treating voice as data could eventually eliminate the need for a circuit-switched network altogether. “Right now we have to run a packet-switched data network and a circuit-switched voice network, and with VoLTE you can simplify that,” said Entner. “When everything becomes one network it will become much easier to run and organize.”
Mobile customers: the biggest winners?
Carriers are determined to make sure that mobile subscribers do not perceive any degradation in call quality when VoLTE launches, due to dropped calls or botched handoffs. Analysts say the industry is taking its time to make sure VoLTE launches smoothly. The stakes are high, because VoLTE has a lot to offer subscribers as well as carriers.
“It’s going to be a whole new ballgame and we know who will win, it’s the consumer,” said Entner. “With VoLTE, where voice becomes a data application, the integration opportunities that exist can only be paralleled with the early dawn of apps on cell phones. Whoever has the most creative ideas and the most innovative implementations will win, and the consumers will flock to it.”
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