Wednesday, November 4, 2015

Will VoLTE Revenue Be Net "Zero"?

What are the revenue implications for service providers if two billion VoLTE (Voice over LTE) connections are in service by 2020? One possible explanation is that VoLTE will represent $100 billion in annual service revenue.

But that is hard to parse, since VoLTE in one genuine sense only represents the ability to sell mobile voice service over a fourth generation network, with native support by the 4G network. For the most part, VoLTE therefore only represents voice revenue that already had been provided using 2G or 3G platforms.

In other words, net revenue might not be much more than "zero."

“Direct revenues from VoLTE will be limited at first,” argue analysts at Juniper Research. Mobile operators initially will focus on experience and quality of service, rather than monetization.

You might say the same is true for Wi-Fi calling (VoWi-Fi). “Operators are launching the service to add value for the customers with little investment, where VoLTE is focused on operator network efficiency,” Juniper Research said.

Whether high definition voice provides a better revenue opportunity might also be questionable. The problem is that HD voice might wind up being mostly a way to compete with over the top voice apps.

If so, then is is unlikely a premium of any sort can be charged for the HD quality.

Facebook Messenger, for example, recently launched free high definition VoIP calling over mobile and Wi-Fi networks. It is tough to compete with “free,” so carrier HD voice is unlikely to represent a chance to hike prices.

In most cases, VoLTE, VoWi-Fi and HD voice are likely to be features, rather than revenue drivers.

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