Will voice get the makeover it deserves with LTE?
Despite the recent Voice over LTE (VoLTE) announcements from several operators, the industry is still unhurried when it comes to rolling out next-generation voice and video calling services. Although interest in VoLTE has increased it is widely understood that most operators are still a year or two from launching such services.
However, VoLTE offers mobile operators a strategic opportunity strengthen their foothold in the voice marketplace, but it requires an acceptance that the game has changed and they must also change accordingly.
WhatsApp, Skype, Facetime and Facebook are well known examples of new voice and video-calling services that have been attracting mobile operators’ customers. Because of this, the operator’s position as the default provider for person-to-person voice and video communications has diminished, and it poses the question: what are the operators’ going to do about it?
The penetration of OTT apps continues to grow - aided by the proliferation of smart phones and the growing availability of data connectivity - giving consumers access to these new alternative services.
More than half of smartphone users worldwide are active users of communication apps and uptake is continuing at a rapid rate. Use of these services is squeezing the margins of mobile operators’ core service revenues, and Ovum estimates that by 2016, consumer use of OTT apps could be costing as much as £32 billion of the operators’ revenues.
Simply put, through their adoption of OTT apps, consumers have shown that they demand more than the old, traditional telephony services. Service cost, or lack thereof, certainly plays a part. However, these apps have also been fast to launch HD voice, video calling and other features to establish an innovation advantage over the operators.
Operators are realising that they too must offer person-to-person voice and video communications that go beyond ‘plain-vanilla’ if they are to remain competitive. And here lies the key to the continued success: the operators must develop their businesses, and acquire the technology to put themselves in the driving seat for innovation and differentiation.
The move to IMS and VoLTE is an excellent opportunity to embrace the changes needed to compete in today’s fiercely contested market, yet most operators are being conservative and simply planning to replicate yesterday’s voice calling services on the new IMS network.
Operators have a wealth of legacy services, accumulated over many years, which their customers use and value. Solutions certainly exist to ease the introduction of, and migration to, VoLTE without the need to recreate everything in the IMS domain. However, offering ‘service parity’ will only ensure subscribers lose nothing from the switch to VoLTE: it offers them nothing to gain. The likely effect will be a continued transfer of market share to those providing more innovative services.
To make the difference that counts, operators need to take measures to compete not on outdated terms, but on the fast paced, customer centric terms of modern day innovative service providers.
Operators should recognise that in order to recapture consumer interest they must innovate and challenge themselves to add new value to communication services. In order to prepare for ongoing innovation and evolution of their communication services, they must take some tough decisions to dispense with the outdated practices and technologies that can inhibit change.
With a more competitive ability to launch new voice and video calling services that use their LTE networks, operators can compete for market-share more effectively. When making plans for VoLTE, operators need to think about the future. Differentiation through innovation will be key to success.
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