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Summary:

Carriers are slowly turning on voice-over-LTE in their networks, but they’re not doing it for the benefit of consumers. Rather they’ve got enterprises services — and enterprise pocketbooks — in mind.

Scott Hoffpauir, CTO Broadsoft
photo: Broadsoft

Hopefully we’ll see major U.S. carriers launch their first voice-over-LTE services this year, but if you’re a consumer, you probably won’t see much of a difference as your voice calls and text messages move to an all-IP channel. That’s because there’s no money to be made offering IP communications services to consumers. Small businesses and enterprises are where the action is, according to Broadsoft CTO Scott Hoffpauir.

“Consumer VoLTE is viewed by most carriers as a replacement for regular voice services,” Hoffpauir told me in a recent interview. “It’s a simpler network and ultimately it will be cheaper to run than their [2G voice] networks. … On the business side, carriers are looking at business services, which is where they can see top-line growth.”

Source: Image Source Pink

Source: Thinkstock / Image Source Pink

VoLTE first launched in the U.S. under the MetroPCS banner, but after T-Mobile bought the regional carrier it began phasing out the service as it phased out Metro’s LTE networks. The big four are all working on VoLTE in some form, but they’ve been far more deliberate and cautious than their former peer.

The likely reason is that from a consumer perspective, VoLTE doesn’t give them anything they don’t already have. Their 2G voice networks and traditional circuit switches work just fine. Since they can’t conceivably charge customers more for VoIP phone call than they can for traditional circuit-switched call, why rush to upgrade their networks?

But that calculus changes when you talk about business users, Hoffpauir said. VoLTE isn’t just a one-trick horse. Along with IP voice and messaging, carriers can layer any number of value-added features on top of VoLTE, from video conferencing and other collaboration services to presence and universal voicemail boxes. In fact, that’s the whole reason BroadSoft is in the mobile business. It sells the applications servers that fuel those add-on features. Sprint and BT are its latest customers.

Sprint

Source: Shutterstock / Susan Law Cain

BroadSoft’s servers work for both consumer and business VoLTE apps, but Hoffpauir is under no illusions that carriers will be targeting its communications apps at the consumers in the near term. With hundreds of free over-the-top communications apps available in the app stores, there’s no way carriers could charge a premium for those features. In the U.S., most carriers have made unlimited voice and messaging an automatic part of every plan. Carriers would actually make more money from the data used by OTT apps than they would by offering those services themselves, Hoffpauir said.

But the business market is ripe for those kind of VoLTE add-ons and, more importantly, willing to pay for them, Hoffpauir said. VoLTE would allow enterprises to easily integrate their corporate communications networks with their mobile phones. A Sprint-powered chat service might not be appealing to the consumer already using Facebook Messenger, WhatsApp or BBM, but it would be appealing to a corporation trying to set up an internal collaboration tool bridging a desktop client and the SMS interface of a smartphone.

Hoffpauir also expects that dual-persona services powered by VoLTE will prove particularly popular, allowing workers to host both work and personal identities – and two separate phone numbers – on the same device.

There’s plenty of reasons for carriers to move consumers over to VoLTE smartphones, not the least of which is that many consumers will be using their phones for business purposes. Eventually carriers will want to shut down the lion’s share of their 2G networks, refarming that spectrum for new 4G services. The cost to deliver a minute of conversation over VoLTE will be cheaper than delivering it over 2G. But those are all long-term benefits. In the short-term, the carriers are all about business.

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  1. the prime driver of volte is spectrum, the 2 & 3g networks are using massive amounts of spectrum and the number of LTE users is maxing out capacity in the spectrum available. the carriers need to move customers onto VoLTE in order to reutilize the 3g spectrum for 4g and provide a better experience for all.

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