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MetroPCS enters the VoIP age. Who will be next?

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MetroPCS(s pcs) has been gunning to be the first out of the gate with a voice-over-LTE (VoLTE) service, and this week  it didn’t disappoint. It’s first VoIP handset, the LG Connect 4G, went on sale in Dallas on Tuesday, making it the first carrier to combine its voice, messaging and internet services onto a single all-IP network.

There’s some debate over whether Metro was the first global operator to get to VoLTE. Both SK Telecom and Uplus kicked off VoLTE in Korea on Wednesday, which due to time zones differences was Tuesday in the US. But there’s no doubt that what MetroPCS has accomplished is a milestone for a US mobile industry that has routed its calls over circuit switches since its inception.

The question now is who’s next? MetroPCS had a fire burning under its rear, which drove it to move everything it could to IP as quickly as possible. MetroPCS uses the same spectrum for both its 2G CDMA and 4G LTE networks. That meant every megahertz it devoted to supporting old-school circuit-switched calls was one less megahertz it could use to bolster its much more spectrally efficient LTE network.

Leap Wireless(s leap) faces a similar issue, but it’s been far less aggressive with LTE and has a 3G network to pick up the data slack. Meanwhile, the big operators are deploying their LTE networks over largely untouched airwaves, so they face far less pressure to recycle their old spectrum.

That doesn’t mean, though, they’re not feeling some pressure. By using VoIP, voice no longer becomes a siloed service. Carriers can overlay a voice call with other IP services such as video chat, multimedia sharing and presence. Called Rich Communications Suite (RCS), this communications layer is the operators’ answer to the over-the-top services that are eating away at their voice and SMS revenues. Let’s take a look at each carrier’s stated plans and unstated motivations, one by one:

Verizon: Big Red(s vz)(s vod) may very well be the first Tier I carrier to move to VoIP, not because it needs to, but simply because it can. By year end Verizon will have an LTE footprint covering 230 million people, meaning its customers will be able to receive a 4G signal in most populated areas of the country.

Verizon has already said it plans to launch its first VoIP-powered LTE phones this year, but unlike Metro it’s facing no pressure to shut down to its CDMA networks and harvest their spectrum. Instead Verizon will focus on enhanced VoIP services targeting enterprise customers. According to CTO Tony Melone, in 2013 Verizon’s network will be so widespread it will be able to sell its first phones without CDMA chips.

AT&T: (s t)Ma Bell’s LTE network may not be as extensive as its Verizon’s but it has a technical advantage its archrival can’t claim. As a GSM operator, AT&T can take advantage of circuit-switched fallback, a standard that allows IP calls to revert to circuit-switched calls when customers leave the LTE network. For Verizon, venturing out from under the LTE umbrella means a dropped call (MetroPCS has the same problem).

AT&T has stated it will offer a VoIP-based service in 2013, but AT&T can launch VoLTE anytime it pleases without worrying about whether it has nationwide, or even citywide, coverage. Customers won’t be able to take their enhanced IP services with them onto the 2G and 3G networks, but at least their voice conversations will accompany them.

In an SEC filing last week, AT&T said it plans to sunset its 2G GSM network in five years – a process it has already started in New York. But even with its primary voice network scheduled for retirement, AT&T isn’t facing any increased pressure to move to VoLTE. AT&T’s 3G networks support voice as well.

Sprint: (s s)The country’s No. 3 operator also plans to have VoLTE online in 2013, though it’s actually already running a 2G and 3G VoIP service today in the from of Sprint Direct Connect push-to-talk. Sprint’s LTE network only went live last month so it has a long expansion road ahead before it seriously considers VoLTE. But of all the major carriers it has the most incentive to move voice to its IP networks. Like MetroPCS Sprint is using the same band, PCS, for its 4G, 3G and 2G networks. The faster it gets to VoLTE the sooner it can start shutting down CDMA and refarm that spectrum for LTE.

T-Mobile: T-Mobile is still a year away from launching LTE so you would think it VoLTE would be the last thing on its mind. But T-Mobile is also a very crafty carrier that has shown it can use technology to overcome its limited resources. T-Mobile is deploying LTE on the same band it uses for its HSPA+ network, which after its system-wide reconfiguration will become its primary voice network. If it aggressively pursues VoIP when it launches, it could start shifting its Advanced Wireless Services (AWS) spectrum from HSPA+ to LTE, which would in turn clear up more room for LTE.

Feature image courtesy of Shutterstock user Shawn Hempel

12 Responses to “MetroPCS enters the VoIP age. Who will be next?”

  1. Andrew J Shepherd

    VoLTE is a mirage at this point, and wireless consumers may wish that it remains that way for several years. From testing both VZW and Sprint LTE at S4GRU, we have found that LTE coverage is notably less than that of CDMA1X and EV-DO on an equivalent site basis. The LTE airlink is just more fragile and is not currently a comparable replacement for CDMA1X voice.


  2. Great discussion, here is a wrinkle (and my apologies since it is not in the center lane of the topic) — the switch to LTE looks to make hundreds of millions of cell phones obsolete in the next five years. This will be a challenge – and opportunity – for manufacturers but also for supply chain (raw and finished) resources and, on the other end, recyclers and/or landfills.

  3. Tsahi Levent-Levi

    The fact that AT&T can revert to circuit switching (and they need due to a smaller LTE footprint) isn’t necessarily and advantage. Doing this call switching stuff between circuit to packet and vice versa is far from trivial – it requires technologies to be embedded in the phone and in the server side, and in both in two separate sub systems (circuit and packet). This makes it hellishly complex to do right, especially with a new technology like VoLTE, which is untested as far as I know.

    VoLTE has ways to go until it becomes solid and ubiquitous enough for the likes of AT&T and Verizon to adopt wholeheartedly.

    • Kevin Fitchard

      Hi reuter,

      Any many ways it’s not. VoLTE uses VoIP just like Skype and Google. The difference is it’s a carrier service not a best effort Internet service. Carriers can prioritize their VoIP packets over other traffic and they can attach the service (and other IP apps) directly to your mobile phone number.

  4. Michael Ingram Jr

    What is the advantage to the consumer in using VoLTE? Will this inch us closer to just paying for a data plan on our cell phone bill that handles our voice, text messaging and data needs?

    • Kevin Fitchard

      Hi Michael,

      I suspect your question is really “Will this save me money?” The answer almost certainly is no. I really doubt the carriers will drop prices just because they get a more efficient way to deliver voice.

      But operators will be able to deliver a whole range of services tied to your phone number that weren’t available before: video, IM, presence, location awareness. My bet is that while they’ll claim those services will make them relevant in the OTT world and allow them to charge more. But I suspect it’s more a defensive move. They’ll use those services as a way to justify the current prices they charge for voice and text.

      So I guess it depends on how you look at it. If you chafe at the idea of paying for a voice or text service you can get much cheaper or for free with a Skype or a WhatApp or an Apple, then you’ll probably see no advantage whatsoever. But if you like the idea of a bunch of now disparate capabilities being linked and accessible to a single unified phone number, then you’ll see some benefit (it’s just a question of whether the benefit is worth the price).

      In any case, the point of the post wasn’t meant to be a dollar-per-dollar analysis of the impact on consumer bills (that post will come later), but a look at how network technology is evolving.

  5. It will be an MVNO. I can see Republic Wireless going that direction since they are already there with their WiFi-first mobile setup. Virgin Mobile seems a good bet here as well if Sprint’s network could take it.

    Nice to see some movement here, but still, there’s nothing compelling to consumers in getting VoLTE. Marketing will have to invent the solution… again

    • Kevin Fitchard

      Hi ARJ,

      I’m not sure. I agree that the MVNOs have a will, they just don’t have a way unless they’ve built their own core networks, which I find extremely unlikely. They can definitely offer their own VoIP service that ride over the data pipe like any OTT service. I’m not quite sure they can prioritize their VoIP traffic over other data services, which is key to what the operators will provide. Then again, I’m not sure the MVNOs would want to. Why pay an operator for VoIP services you can provide for much cheaper by contracting out with an independent player.

      Thanks for commenting. You definitely got me thinking… :)

      • MVNO companies don’t need to build, they just need to present themselves as a suitable testing ground for altnate pay models that Tier 1 companies would rather not market test against their build-out and brand marketing. Hence the companies that I mentioned, they aren’t so much able to experiment just because they can, but they do have enough “hey I’m new” momentum to try somthing new tat gives Tier 1 folks a bit more time to let usage bugs settle a bit.

        Definitely something worth thinking about if I were them though.

      • Kevin Fitchard

        Hi ARJ,

        I agree completely. I’m just saying they can’t do VoLTE unless they do build. They can do OTT VoIP, but VoLTE is an infrastructure play. It’s carrier-grade VoIP which is supposed to replicate the quality and availability of a current circuit-switched networks, but it requires an IMS core, which MVNOs don’t have (Virgin is the exception because it’s owned by Sprint).