Report: VoLTE lacks business case despite increase in rollouts

Voice over LTE (VoLTE) is being hyped as a major growth market spin off from LTE network rollouts, yet analysts claim there is still no business case for VoLTE and that there are some misleading messages about the technology.

"VoLTE rollouts are taking off, but there is no business case for it yet, and dubbing it as 'HD voice' is misleading because there are already 100 high-definition (HD) voice networks running on HSPA around the world. And Africa has the best HD voice networks," said Stéphane Téral, principal analyst for mobile infrastructure and carrier economics at Infonetics Research.

The Infonetics Research report also noted that there were 1.5 billion mVoIP subscribers worldwide in 2013, the bulk via OTT applications. However, despite a 12 per cent CAGR for over-the-top (OTT) mobile VoIP (mVoIP) service revenue expected from 2013-2018, "most providers in this space are making very little money per user--an unsustainable business model for many independent companies," the company said.

Diane Myers, principal analyst for VoIP, UC, and IMS at Infonetics Research, added: "In the highly dynamic over the top mobile VoIP market, Japan-based Line has topped Skype as the market leader, capturing roughly a quarter of worldwide active users in 2013. Line's been able to successfully think outside the traditional voice box, offering paid services through application add-ons like games and stickers that not only create a revenue stream, but also increase usage of core services."

The study shows that while there were 12 million VoLTE subscribers worldwide in 2013, mostly in South Korea, by the end of 2014 there is expected to be an additional 30 commercial VoLTE networks launched, up from eight commercial services in June this year, with VoLTE subscribers increasing to 51 million.

The majority of OTT mVoIP application usage continues to be dominated by Asia Pacific after a shift in 2012; the region boasts a mobile broadband penetration rate of over 100 per cent. In particular, the use of OTT mVoIP is skyrocketing in China, South Korea, Japan, India, and Indonesia, the report notes.

Meanwhile recent research from ABI Research said the increasing spread of LTE networks globally is stimulating the deployment of VoLTE. LTE-related mobile subscriptions surpassed 230 million at the end of 2013 and will grow at a compound annual growth rate of 36.6 per cent between 2014 and 2019, according to the research company.

Because of this growth, there will also be around 59.6 million VoLTE subscriptions by the end of 2014, and over half (56 per cent) of LTE-related subscriptions will be using VoLTE services by the end of 2019. 

This growth in VoLTE interest is fuelling the carrier VoIP and IP Multimedia Subsystem (IMS) market also, with 37 per cent year on year growth in the in the first quarter of this year, according to previous studies by Infonetics Research.

For more:
- see this Infonetics Research note

Related Articles:
UK government discusses national roaming deal with operators to tackle poor coverage
3 UK launches app to let customers call and text using Wi-Fi
EE hits back at OTT players with voice over Wi-Fi service
du signs up for Nokia's IMS to prepare for VoLTE
Infonetics: VoLTE fuels 37% Q1 growth in carrier VoIP and IMS

Suggested Articles

Sprint said it will offer discounted service to customers age 55 and above.

Unlimited data plans placed a strain on carrier networks last year, but according to OpenSignal the carriers met the challenge.

Verizon plans to bring 5G to four U.S. cities this year and hopes to have standards-based equipment in place for some of those deployments.