The Voice (over LTE) Double Whammy

Yes, the feared "Double Whammy".  It’s a technical term.  

There are two things set to impact the investment in IMS-based voice over LTE.  

One item is an undisputed truth, the revenue per minute of voice continues its interminable slide towards rock-bottom.  As industry pundit Dean Bubley posted the other day:

“The growing elephant in the room is the growing realization in the industry that mobile voice telephony revenues are declining.”  

The point, from Dean’s perspective, is that it will be nearly impossible to find a return on investment for a massive new IMS/VoIP system.  As he concludes to eloquently:

“What operator will want to invest in more expensive technology in order to provide a worse service in a declining market?”  

Whammy #1.

Whammy #2 is one I don’t think gets the attention it deserves – namely that the generation of people, but particularly those under 30, would much rather text, email, Facebook, whatever… with their smartphone than actually make a phone call.   

To make the point, Nielsen recently released its Q3 2011 Mobile Media Report on US mobile habits.    

Across all age-groups/gender, the average number of voice minutes/month decreased 12% between 2009 and 2011. 

In the same timeframe, the average texts/month increased 35% and 44% for woman and men respectively. 

Perhaps adding insult to injury, the word “voice” didn’t even appear in the Nielsen report until page 24!  

Maybe it's just not that interesting any more.  The first 23 pages were filled with statistics about all the great over-the-top apps people use religiously. 

 

 

 

Comments

[M D]

Bang on.

Here's another "whammy".

VoLTE architectures essentially assume a VoIP service that is vertically integrated into the physical access network. That is, the service works only when connected to the specific network or a roaming partner thereof.

This puts them at a disadvantage to "over the top" VoIP services that work from any point of Internet connection. That's an increasingly significant disadvantage. That is, users want their VoIP service to work whether they're on mobile broadband, at home, on a hotel WiFi connection, on the office LAN, or on a coffee shop hotspot. At what point does a "phone number" that only works on a specific network cease to have appeal?

So - add to the cost of VoLTE solutions, their quality issues, and the decline of the perceived value of "voice" the fact that "network specific" callability is a turn off. In order to compete, the voice service needs to work from arbitrary points of Internet connection. In order to do that VoLTE services have to be able to work "over the top" (ironic). Something that VoLTE architectures don't tend to be able to do... and making the RoI even more questionable.