Voice and SMS over LTE

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. 

 

 

 

LTE on sale

As we head into the "buying season" also known as Christmas, there's no doubt mobile products/services are going to be big sellers.  

Verizon is maintaining a commanding lead in the US LTE market and the global market in general.  Just last week, analyst firm Telegeography published that Verizon had an estimated 60% of the total LTE subscribers worldwide with 3.1m.  

It sounds like LTE is compelling for Verizon's subscribers.  So I was a bit surprised when I heard an ad saying LTE was on sale at Verizon:  

To be fair, it's just a little sale, a holiday promotion where new subscribers can get 2x the data for the same price.  This got me thinking... if I can get 4GB of data/month for $30 on LTE, what does that cost on their 'old' 3G (EV-DO) network.  Hummm...

The standard EV-DO data pricing as of Dec 2, 2011:

• 2Gb ->  $30
• 5Gb ->  $50
• 10Gb ->$80

LTE data is 50% off.  But wait... I thought LTE was compelling, super fast, wonderful, why would it be 50% the price of EV-DO? 

Verizon's LTE is available in ~130 markets in the US, whereas AT&T has 'launched' service in 15, so they can't be facing competitive pressures.  

I will posit one of the problems is battery performance.  Verizon's 'dual radio' approach to addressing the voice over LTE problem is sucking electrons... fast.  This was a known and acknowledged problem associated with a dual radio approach.  I wonder if CS Fallback will do a better job of inspiring consumer confidence.

 

 

 

 

CS Fallback's slow call setup times

About two years ago, Kineto published an analysis of CS Fallback and, among other things, came to the conclusion that call setup times would be about 50% longer than a ‘standard’ UMTS call setup times.  

Kudos to Zahid over at 3Gand 4G Wireless Blog for recognizing the problem.

It will be interesting to see customer acceptance of CS Fallback devices when they are finally introduced into the market.