This was a hypothetical question posed in one of the panels I moderated at the recent CTIA show. As you can imagine, the question solicited quite a bit of discussion among the audience and the panelists, which included mobile operators and the major infrastructure vendors. Before posing the question, the audience member quoted several news stories that talked about delays to the introduction of VoLTE and, most recently, Verizon Wireless’ decision to delay VoLTE-only handsets from late 2014 to mid-2016. Note that Verizon Wireless was not on the panel.
The answers given by the panelists to the question were simple: “don’t worry, we will get it to work.” In fact, the sentiment was more like “we MUST get it to work.” Generally, the view was that VoLTE is key to the future of the mobile operators and that since current 2G spectrum will be refarmed for LTE, VoLTE is required in order to provide voice services. Obviously, there is a lot of effort going into ensuring the performance of VoLTE is as consumers expect. I for one do expect that the industry will address the lingering issues, and in a year or so, VoLTE will be established.
But what if the CTIA panel and I are wrong? What if VoLTE continues to stumble or takes so long to stabilize that consumers lose interest? What if VoLTE becomes another wireless technology that took too long to develop and, by the time it was ready, other solutions had passed it by? The wireless industry is littered with examples like this from network-based location services (which competed for a time with handset-based GPS) to WAP (remember?) and WiMAX (which was overtaken by LTE). So even though VoLTE may eventually work, what if it comes too late for impatient consumers?
For the consumers, there may be little real impact. The fact is that there are multiple IP voice solutions available today from Skype and FaceTime (among others) to VoWiFi. The fact is that today I can call my kids with FaceTime and have a great audio experience. Skype will let me do the same thing and there are numerous solutions out there for Android users. In short, I do not need VoLTE today to make IP calls and I have numerous options available that are free.
But for the mobile operator, this becomes a major problem. Over the last few years, revenue has obviously shifted away from voice to data, as people use more and more broadband data.
Smartphones and tablets obviously encourage higher data use. And the operators have responded with bigger buckets and lower pricing. But many people use their mobile phones to make phone calls, just like in the olden days! Voice service is needed by the majority of consumers. And so a major part of the mobile operator value equation is the ability to provide mobile voice. If the mobile operators are unable to do this and consumers flock to the OTT voice applications and services, consumers will never look back.
At this point, the mobile operators will simply become bit pipes with no hope of offering differentiated services. Without VoLTE and associated services, consumers will simply look for the cheapest service on the network that provides the best service. Some would argue that the industry has already reached this point, but I would differ – the mobile operators still have the opportunity to provide services (like HD voice) that consumers will value and provide some differentiation. But without VoLTE, given the pace at which the OTT vendors are moving, it is unlikely the mobile operators will get another chance. VoLTE is likely the last chance the operators have; it is that critical. And for that reason, the industry MUST make VoLTE work and soon. And I believe they will.
IAIN GILLOTT, the founder and president of iGR, has been involved in the wireless industry, as both a vendor and analyst, for over 20 years. iGR was founded in 2000 as iGillottResearch, Inc. in order to provide in-depth market analysis and data focused exclusively on the wireless and mobile industry.