Carrier "Next Generation Network" Initiatives Rarely are Easy, Often are Not Successful

It wouldn’t be unfair to note that telecom industry “next generation network” initiatives often have failed to get traction. Integrated Services Digital Network and Broadband-ISDN (now called Asynchronous Transfer Mode) provide examples.

More recently, IP Multimedia Subsystem and Rich Communications Service have been proposed as next generation network platforms. In similar fashion, network functions virtualization represents the latest carrier effort to overall the physical layer of public networks.

Although voice over LTE (VoLTE) is the largest driver for IP Multimedia Subsystem, it also presents new challenges such as a limited set of compatible handsets and a weak business case.

“It’ll be tough to justify spending capital on a new network for just voice that represents flat-to-declining revenue, requiring providers to look well beyond running voice over IMS,” says Diane Myers, Infonetics Research principal analyst for VoIP, UC, and IMS at Infonetics Research.

“VoLTE rollouts are taking off, but “There is no business case,” at least yet, for voice over Long Term Evolution, says Stéphane Téral, Infonetics Research principal analyst.

To be sure, that could change over time, and some might argue that high-definition voice services already operating on over 100 global GSM networks do have a business case, mainly related to boosting the value of carrier voice services, and thereby stemming churn.

Myers also notes that “most providers in this space are making very little money per user, an unsustainable business model for many independent companies”

Some 83 percent of carriers surveyed by Infonetics say they will deploy voice over LTE (VoLTE) by 2016, up from three percent today. Supporters say the value will come as VoLTE will enable converged services over multiple access networks and devices.

How much that might happen, and whether the benefits are largely found in new revenue, avoided churn or some other value, is as yet a bit unclear.

Fixed-line voice over IP service continues to represent the majority of IMS deployments, with 100 percent of survey respondents planning to have business and/or residential VoIP services running over IMS by 2016.