Thursday, September 28, 2017

Why Voice is Not Central for Next Generation Networks

A fateful decision was made when the global telecom industry decided the next generation network would be based on Internet Protocol, and not some traditional architecture such as ATM.

All of today's strategic issues around "over the top" services and value grow directly from that architectural choice, since IP fundamentally separates network access and all applications that run over the IP networks.

By definition, all apps are "over the top," no matter who owns those assets. In choosing to build the next generation networks on IP, the industry also chose to create the "dumb pipe" business model.

Even when telcos sell carrier voice, those services architecturally will operate "over the top."

At the same time, voice is receding as the core revenue driver.

According to Reza Arefi, Intel director of spectrum strategy, nobody is working on voice as part of 5G at any of the core standards bodies. That might come as a shock to many observers, but simply seems to point to the changing value of various revenue streams in the access business, and the fundamental way applications are created and delivered on modern networks.

The lack of focus on voice also is a reflection of changes in the core requirements for modern communications networks, where the growing range of capabilities come in the “connecting computing devices” area, not voice or messaging.

Also, the growing reality is that voice is a feature, less a key revenue driver. It is a key function, to be sure; just not the driver of revenue growth.

That, in part, explains the lack of work on voice as a core feature of 5G. That “neglect” is not new. You might recall that the 4G standard also did not originally support voice, either.

It might be reasonable to argue that 5G standards work does not include voice support because voice is seen as a service supported on 4G. Others might argue some extension of voice over Wi-Fi will be part of the solution.

Consider revenue drivers for the industry globally, which are predicted by STL Partners to continue declining significantly.
source: STL Partners

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