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VoLTE and the green button: Have operators lost the differentiation with voice?

Green ButtonIs the last bastion of telecommunication service – the humble and basic voice call – is about to get its come-uppance? Devalued to the point that unlimited minutes are included in many bundles, bypassed through VoIP and many internet services, has Apple now opened Pandora’s box to finish off any value left?

 

 

Demolishing another fundamental service

Apple quietly demolished the SMS text business overnight when it introduced iMessage in 2012. Any text messages sent between iPhones was directed through their servers free of charge, bypassing the highly profitable text message SMS. Instantly, some 20% of network profits were at threat. OTT applications such as What’s App and Facebook Messenger provide similar functions, although restricted to other registers users of those services.

We’ve now seen unlimited text messages being included in monthly bundles, effectively discounting the cost of the service to almost nothing.

Voice minutes have also been reducing in cost, with the view that this will inevitably become marginalised. Apple embedded Wi-Fi Calling natively into the dialler in iOS9. This requires some technical development and equipment by supporting network operators, which not all have implemented.

Another major milestone happened last week, when Apple announced iOS10 will allow any third party App to use the green “dialler” button. Call your contacts using Skype, Viber, What’s App or other similar service. This has been the case for Apple’s own Facetime App for a while, and won’t require any new features within the network, so it’s more of a commercial decision than a purely technical feature. But it does highlight the trend. Claus Hetting of Wi-Fi NOW foresees this as to be the end of cellular voice, which I think is a step too far. Other new voice features from Apple include automatically transcribing voicemails to text and enabling voice call encryption. Full details here. The software will be a free update for compatible iPhones available in September.

The missing big announcement(s)

Meanwhile, commercial progress with VoLTE remains disappointingly slow. At the end of 2015, there were 40 networks with live commercial service. It was expected this figure would climb rapidly during 2016. The GSMA has even setup a task force (VIRTUE) to expedite VoLTE rollout.

Some of those 40 networks are very large – including ATT, Verizon and T-Mobile US. But announcements are still much slower than anticipated. SysMech spills the beans on some of the reasons, including poor call quality, with low tolerance for packet loss, and delayed fallback to 2G and 3G when out of LTE coverage.

Nonetheless, VoLTE can offer a superior technical service than VoIP with faster call setup, better spectral efficiency and wider device compatibility. It certainly works better in a congested public environment than Wi-Fi Calling.

With voice revenues declining, it can be difficult to justify large expenditure on duplicating the service in LTE. Some networks will simply rely on 3G fallback (CSFB) which is widely available.

But is voice relevant anymore?

I spoke with Dean Bubley, an analyst renowned for more unconventional views, and who has been looking at the wider topic of  Voice services for some years.

His take is that perhaps Voice isn’t quite so important as it used to be. It’s no longer the predominant method of communication, especially amongst the younger Technorati. Messaging, group chat and video are all popular and have their advantages and disadvantages. He believes that we should look at the purpose and application requirements, rather than prescribing a single “one-solution-fits-all” voice telephony service that was developed over a century ago.

I confess I’d find it difficult to make the break and not have voice call service on my smartphone, connected using old-fashioned phone numbers. But I am coming to the point where a fixed-line home phone is more of a nuisance than a benefit, since it mostly alerts me to incoming calls I don’t particularly want to take. Fortunately that’s not the case for my mobile yet. And if people aren't calling me using my mobile phone number, but some other identifier, this drastically reduces the need for international roaming. If I could buy a local data service, provisioned electronically using eSIM, then I'd almost certainly get a far better deal.

So why invest in VoLTE?

A strong reason to adopt VoLTE is to make best use of spectrum – those frequency bands migrated to LTE can carry more traffic than if kept on 3G. And any new LTE frequencies, especially the lower 700 and 800MHz bands, allow operators to significantly increase coverage and in-building penetration. That’s of little use if voice service isn’t available (i.e. where LTE coverage is good, but 3G absent). The UK operator Three has made good use of their so-called SuperVoice service, rolling out VoLTE at 800MHz and significantly increasing coverage from existing sites. They’re not doing it to make more money from higher quality voice service or other VoLTE features. Indeed, they were one of the first to offer a dedicated Skypephone in 2007 with free Skype calling as part of the package.

Medium term, I would expect this to be a more important area of R&D than 5G. While customers may not want to pay directly for voice services, they do expect them to work flawlessly on demand, and would move networks if they don’t. There are numerous companies offering analytics, traffic management and SON features to make the system work better. There are still some fundamental issues at the cell edges, specifically handover between adjacent sites and assisted by close inter-cell interference co-ordination (eICIC). By contrast, 3G relies on soft handover which works well for many scenarios.

VoLTE roaming is much more complex than for 2G/3G and is still relatively limited. It's most likely to be deployed within the global operator groups first, setting up calls within milliseconds. While LTE roaming is becoming more common, there may be less business incentive to address this issue, so sticking with 2G/3G roaming is adequate in many cases.

Implications for Small Cells

There are numerous small cell vendors with LTE only products. These will be a much easier sell to VoLTE capable networks, especially where used purely for data capacity growth.

For enterprise, we are still in the transition stage where 3G voice support is considered essential. There maybe exceptions such as Verizon and China Mobile, but most networks will need fallback to maintain device compatability and ensure good quality service.

This means there is still plenty of mileage in 3G only and 3G/LTE multimode small cells, especially in-building. Voice over Wi-Fi just isn't good enough in congested environments. Where deployed for capacity, small cells would either need network support for VoLTE, or rely on 3G fallback either using multi-mode small cells or assume good 3G coverage is already in place. 

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