For years, Voice over LTE (VoLTE) settled into a “one step forward, two steps back” rhythm that slowed mobile operator deployments. The potential benefits of VoLTE (more cost effective operationally, superior voice quality, enablement of advanced communications services, etc.) were rarely questioned, but guaranteeing end-to-end service quality and reliability proved elusive and undermined the confidence of operators that VoLTE could hold its own as a mainstream consumer and enterprise-grade technology.
Fast forward to today, when mobile operators’ dedicated investments and commitment to build out 4G LTE networks have propelled VoLTE to a market-ready technology. Gone are the tentative baby steps; replaced by giant leaps by the world’s largest carriers. This isn’t to say that VoLTE launch delays are history as operators rightly continue to test reliability, but over the past several months leading operators such as SingTel in Asia, China Mobile, as well as Sprint and T-Mobile in the US have put markers down for VoLTE launch plans.
As such, the question is no longer if VoLTE will enter the market, but how VoLTE should enter the market. In December 2013, market research consultancy iGR released a study forecasting the impact of VoLTE on consumers. Regarding the study, U.S. VoLTE Market Forecast, 2012 – 2017: Still Moving Toward the VoLTE Era, iGR stated that, “consumers will benefit from the many new multimedia products and services that mobile operators will be able to offer as they transition from legacy voice solutions to the new platform.”
iGR’s comments suggest that mobile operators eye the consumer mass market as a way to rapidly recoup LTE network investments, and this consumer focus is a driving force behind operators’ unwavering focus on delivering consistent voice quality and reliability. Consumers, after all, are unlikely to switch carriers or move to VoLTE for the promise of better call quality (for most, today’s quality is more than sufficient), but it is a sure bet that customers will exit en masse if a switch to VoLTE results in more dropped calls and poor connections.
The consumer market is massive, but the best and most immediate path for mobile operators to monetize their LTE investments – and generate revenue from advanced communications services offered over VoLTE – is through the enterprise market. Focusing on the enterprise market is not easy; the consumer market is akin to gazing at the moon, impossible to ignore, while the enterprise market is a more distant, barely visible to the naked eye planet that is easily overlooked. But emerging trends and broader market factors are bringing the enterprise VoLTE market into focus, and strengthening the argument that it should be a core component of an operator’s VoLTE strategy.
Growing enterprise demand for Mobile UC fuels case for VoLTE
Mobile operators find themselves at the epicenter of two converging trends: a desire to extend relationships with their top tier enterprise customers, and growing enterprise demand for mobile unified communications (UC).
Enterprise demand for mobile and cloud UC solutions, a $26 billion market opportunity according to International Data Corporation (IDC), is only increasing in value and popularity as these services are provided over increasingly faster network speeds. Rather than focusing solely on traditional voice and messaging, mobile network operators must meet the demands of the mobile enterprise by delivering UC applications over LTE and offering end-users a superior user experience made possible by LTE network investments.
Fueling mobile enterprise demand for UC services is evolving workforce dynamics. By 2020, nearly 50% of the U.S. workforce will be comprised of millennials, according to the U.S. Bureau of Labor Statistics – and just five years after that the figure jumps to 75 percent.
This always-on, always-connected generation will bring its dynamic and diverse communications expectations to the office – which means that enterprises will need to plan for and manage the Bring Your Own Device (BYOD) workforce.
With end-users demanding mobile unified communications to enable them to work efficiently, from anywhere, enterprises will be turning to mobile operators and even fixed line service providers to deliver mobile access to voice, video, instant message and presence, as well as conferencing and collaboration capabilities.
Enterprise VoLTE can be leveraged to combat OTT threat
Every day that mobile operators do not communicate and deliver in-demand enterprise UC services is another day that Over-The-Top (OTT) players can further wedge their own messaging, voice, and other OTT services between an operator and its customer base. Even though OTT players can deliver strong voice and messaging on LTE network, mobile operators are well positioned to deliver services over LTE because they have a trusted brand, control of the network, service continuity, and other unique assets that come along with ownership of the network.
This window of opportunity does not exist in perpetuity. As they accelerate the launch of VoLTE across global markets, mobile operators must determine which VoLTE-enabled services and features will resonate rapidly with enterprise end users and consumers. Operators seem to recognize the time factor, as a 2013 study by IMS Research predicted that, “…the biggest change coming over the next few years will be the rise of VoLTE,” and that over 90% of the operators participating in the survey plan to deploy VoLTE by 2015.
Enterprise UC services can be delivered during VoLTE transition
Enterprise demand for mobile and unified communications services today is very real, and UC will be the first applications of volume over LTE, enabled in part by the fact that these applications can be delivered today. That said, the current state of the market finds mobile operators at all stages of LTE migration (2G, 3G, 4G). The challenge is how mobile operators can meet this enterprise demand whether they have fully migrated to 4G LTE, plan to migrate in the near-term, or continue to leverage 2G/3G networks.
Assuming mobile operators leverage a Telephony Application Server (TAS) platform with Voice Call Continuity functionality, UC services can transition effortlessly from legacy networks as an operator migrates to VoLTE. This allows mobile operators to enter the high margin UC market with enterprise customers that will migrate to their LTE network as they build out their VoLTE capabilities. The ability of operators to deliver mobile and UC services to enterprises and consumers at all stages of LTE transformation can result in new revenue opportunities through enhanced services, increased customer satisfaction and churn reduction, and the ability to more rapidly monetize their LTE network investments.
The opportunity for mobile operators to capture enterprise customers and revenues is tangible; and while consumer services should always be a core offering, mobile operators should remain enterprise-focused as its VoLTE strategy is developed and executed.
Michael Tessler is President and Chief Executive Officer at BroadSoft.
