How HD Voice Can Save Wireline Telecom

6 Comments

[qi:090] Just as AT&T (s t) CEO Randall Stephenson is conceding to the permanent loss of wireline revenue, high definition (HD) is emerging as a way to save the all-but-abandoned asset. HD finally gives customers of AT&T and other telcos a reason to retain wireline connections, for while the somewhat better voice quality associated with wireline already provides some resistance to cord-cutting, HD yields wireline telephone calls that sound dramatically better. The HD “being there” experience can make wireline an essential service, for everyone from deal-making lawyers to texting teens.

In a white paper I wrote back in December 2000, entitled “Telephony Unplugged” (PDF), I documented the threat wireless posed to wireline, arguing that the arrival of price parity between between the two would transform the business-focused wireless industry into a consumer phenomenon. The mobile industry subsequently tripled, as wireless-only customers grew to 20 percent from 4 percent. But while wireless HD options exist, lower cost and higher reliability broadband gives wireline an advantage.

Doubling the frequency response represents the starting point for HD (analogous to a move from AM to FM), but HD competition also promises to spark a steady stream of innovations. The call-by-call negotiation of codecs made possible by SIP renders HD a meritocracy. There are an infinite number of tuning options available to improve the acoustic performance of devices and navigate network impairments, and efforts to close the gap between remote and in-person meetings offers an endless range of research topics.

Mobile dominates the future plans of both telcos and cablecos, for the telcos view the year-over-year declines in wireline experienced since 2000 as permanent, and the cablecos are offering their digital phone plans to the same shrinking pool of customers. In the meantime, both have a range of HD implementation options that complement existing investments in data infrastructure. Which of them will get HD religion first, however, remains unclear. The wireless companies may even move first, as the 3GPP standard includes the wideband codec AMR-WB. In any case, HD represents the possibility of a communication industry organized around the novel notion of expanding communication functionality.

6 Comments

mjgraves

While I am a great proponent of wideband telephony (HDVoice if you like) I think that it’s actually a little tangential to the idea of saving wireline service. I’m doubtful that improved call quality alone will save that business.

However, in the process of delivering wideband we will have to, by definition, move to an all IP based network. That will be the basis of a tremendous transformation of telecom as we now know it. Wideband will be the first benefit, but video calling and spatial capability (stereo or surround) will follow soon after. Very possibly evolving into immersive virtual environments.

What we’re really going to see is the evolution of stodgy old telecom into the kind of thing that’s now associated with online activities like Second life.

Daniel Berninger

The assertion of the column is not that a one time voice quality improvement will transform the telecom industry. The proposition is “continuous improvement” of the underlying value proposition. The expansion of addressable applications made possible by Moore’s Law drives growth of the infotech industry. Intel did not stop after moving from 386 architecture to 486 or from 486 to Pentium. A similar continuous improvement dynamic of voice quality could drive the telecom industry. The present failure to improve voice quality accounts for the lack of interest in voice relative to communication modes that benefit from more innovation.

Georgie

You’ve accurately assessed Randall Stephenson’s point of view, but it seems far-fetched to say that “dramatically better” wireline phone calls will capture the attention of a market that is already tolerant of fuzzy connections and dropped calls. Texting teens turning around the wireline industry….I don’t buy it. As much as my job depends on the longevity of the wireline business, I’m going to have to put my eggs in another basket than HD.

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