August 12th, 2015
Solid business growth and momentum in H1 2015 for Computaris
August 7th, 2012 by Computaris Articles Blog Insights
It seems like everyone is looking to roll out their own Long Term Evolution (LTE) networks these days. According to a GSA (Global Mobile Suppliers Association) report, over 70 LTE operators have already launched commercial services, including 25 networks launched in the first 4 months of 2012. About 320 operators worldwide have committed to commercial LTE network deployments or are currently engaged in trials. All these numbers can only confirm that LTE is one of the fastest developing mobile system technologies ever. Verizon Wireless, the US operator which leads the LTE race, offers 5-10 mbps data rates, while the company’s 4G LTE network now covers now two-thirds of the U.S. population.
LTE was designed as a fully packet-oriented multiservice system. 3GPP has defined IMS as the long-term solution providing circuit-switched services in the “all-IP” LTE network. There are currently two main approaches for designing voice over LTE:
1. Circuit-switched fallback – the mechanism to move a subscriber from LTE to a legacy CS network (3G or 2G) in order to obtain voice service.
2. IMS profile (VoLTE) – the LTE system to provide VoIP service and high-speed data service simultaneously. The target solution is named Single Radio Voice Call Continuity (SRVCC) and aims to provide IMS-based voice over LTE and also voice continuity from LTE coverage to 2/3G CS.
Both of the above-mentioned solutions have their pros and cons. In terms of weaknesses, the CS fallback is known to have issues with the slow call setup times and the increased signaling load on the HLR, and IMS is a lot farther that anyone really wants to say. In comparison with LTE developments, the adoption of IMS has been slower than expected. IMS mass deployment dates are undefined for most of the operators. There are issues related to costs (IMS requires a complete new core network), as well as scalability and integration with the existing devices.
Skype, as well as other over-the-top applications (OTT) like Viber or Apple’s iMessage have set the bar pretty high for voice calling – works great and offers free basic services. Skype is available on iPhone, Android, RIM and Nokia, plus every PC platform available. It’s free and available everywhere. It offers free Skype-Skype calls, while users can also get a PSTN phone number with a voice mail box and the ability to send SMS. Skype was the third most downloaded mobile application in 2011 (after Angry Birds and Facebook), and has almost 700 million registered users and nearly 1 billion dollars in revenues. One top of that, LTE mass deployment seems to be the opening Skype has been looking for – an ultra-fast, mobile IP network with a large coverage. In a world where billable minutes of use are the king, the fact that voice calling services are priced at zero will make it difficult for mobile service providers to compete in the market.
One solution which is starting to be adopted by mobile operators is charging VoIP traffic extra – paying for calling over mobile data networks versus the free ride we now have. The first step in this direction was taken in South Korea, where regulators have decided to allow operators to charge users extra fees for VoIP applications or block their use entirely. In Spain, the TeliaSonera Yoigo subsidiary charges their subscribers with 6 Euros/month per 100 MB of VoIP traffic, which supports between five and ten hours of Skype talking. Some are claiming that this is a violation of net neutrality rules. But it is clear that carriers are eager to hold onto their traditional, yet declining voice revenue, which currently represents about 60 percent of the worldwide mobile data revenues. The technology is out there and operators are now saying “you can talk, just pay for that.”
Moving to LTE, where everything is data traffic, it would seem logical to move away from time and distance-based billing and go for data only. It is almost inevitable that mobile plans with data usage only will come in the next years, and that phone calls will be just another form of data. However, as the VoIP threat evolves, mobile operators will need to adapt their business model and find ways to maximize the value of their LTE investments.
Author: Cristian Constantin, System Architect