Managed Voice over Wi-Fi Should Improve ARPU, Study Suggests
It stands to reason that a voice over Wi-Fi (offload) would boost profit margins for any mobile carrier voice service, at least marginally, as the carrier benefits from a lower cost per bit profile, as access is shifted to the fixed network.
A new analysis by ACG Research suggests that is the case.Looking at a business case for a developed country service provider with mature VoLTE penetration, ACG Research suggests managed Wi-Fi voice quality also helps, as it encourages users to make heavier use of voice over Wi-Fi mechanisms.
The results suggest that average revenue per user is maximized when the quality of VoWi-Fi is high (resulting in increased usage) and data offload is easily available (resulting in lower cost per bit).
In the first scenario, the service provider’s network features 10 percent use of untrusted VoWi-Fi and no use of trusted Wi-Fi.
This results in a low adoption of VoWi-Fi due to quality and user experience issues.
In the second scenario, the service provider’s network uses 30 percent trusted VoWi-Fi and seven percent untrusted VoWi-Fi, resulting in VoWi-Fi penetration that is higher than VoLTE.
This combination delivers $19.91 billion EBITDA (24 percent higher as compared to the first scenario) and a monthly APPU of $19.91 (35.5 percent higher as compared to the first scenario) with both ramping to Year five.
As VoWi-Fi grows the cost per voice minute drops, reaching a value of $0.0072. In the first scenario the service provider’s network is dominated by VoLTE penetration, resulting in the cost per voice minute being 19.5 percent higher than the second scenario.