MetroPCS (NYSE:PCS) and South Korean carriers SK Telecom and LG U+ wrestled over bragging rights this week as each vied for recognition as the operator that launched the world's first VoLTE service, but the reality is that VoLTE competition will ramp up quickly in their home markets.
MetroPCS told our sister publication FierceWireless that its VoLTE service is only available now in the Dallas-Ft. Worth market. To use the service, a customer must have the LG Connect 4G, which MetroPCS is selling for $249 before taxes and after rebate offers. The VoLTE service will not work on existing LG Connect smartphones that have already been sold.
MetroPCS has been an LTE trendsetter. It also became the first U.S. operator to offer LTE services with its September 2010 commercial launch in Las Vegas.
South Korea's largest operator, SK Telecom, and the third largest, LG U+, launched VoLTE with HD Voice service this week. KT, the nation's second-largest carrier, has pledged to launch VoLTE this October. Samsung's Galaxy S III is the only VoLTE-compatible smartphone for sale in South Korea currently. Previously sold Galaxy S III's will gain VoLTE capability via a software upgrade slated for availability at the end of August, said PC World, adding that LG's Optimus II, sold by LT U+, is expected to be software upgradeable for VoLTE service in South Korea as well.
Key drivers for VoLTE are spectral efficiency and reduced cost of operations per subscriber, but improved voice quality will be a major selling point to end users. SK Telecom and LG U+ are touting their VoLTE launches for the accompanying high-definition voice capability.
However, almost all commercial VoLTE launches are expected to support HD Voice. Though HD vocoders can potentially be implemented with 3G, "from day one the main vocoder operators are looking at when deploying the initial VoLTE phones is the HD vocoder," said Jim Seymour, senior director of the wireless CTO organization at Alcatel-Lucent (NASDAQ: ALU).
The high-definition vocoder being used with VoLTE provides better voice quality, particularly in quasi-stationary conditions, and is better than older vocoders at suppressing background noise. "That's one of the other drivers for getting to VoLTE and differentiating voice quality," he told FierceBroadbandWireless.
With this week's launches, VoLTE momentum is expected to pick up. In a recent report, Signals and Systems Telecom predicts subscriptions for voice over mobile broadband (VoMBB)--which includes both voice over LTE and voice over HSPA though the latter has not yet launched anywhere--will pick up quickly as more operators deploy the services next year. "Due to the early efforts of North American and South Korean CDMA carriers, we expect the VoMBB subscriptions to reach nearly 10 million by the end of 2013," said SNS.
The firm predicts the VoLTE industry will grow at a compound average growth rate (CAGR) of nearly 150 percent from 2013 to 2016, eventually accounting for 450 million VoMBB subscriptions by the end of 2016. "By this time, almost 5 percent of all worldwide mobile carrier voice subscriptions will be based on VoMBB," said SNS, adding VoMBB will generate nearly $100 billion in voice service revenues in 2016.
SNS predicts there will be 100,000 VoMBB subscriptions by year's end, but research firm Infonetics is more bullish, forecasting 300,000 VoLTE subscriptions by the end of 2012. Infonetics also predicts that by 2016, VoLTE will make up about 14 percent of global mobile VoIP revenue, "while over-the-top mobile VoIP continues to make up the lion's share by far."
VoLTE has generated considerably less excitement in Europe. SNS notes that LTE carriers with a 3GPP GSM background "have remained rather passive in terms of VoMBB adoption." That is partially due to the fact that, unlike CDMA operators, GSM/WCDMA operators can use circuit-switched fallback (CSFB), which allows an LTE handset to switch to 2G or 3G service when LTE is unavailable.
In February 2011, Verizon Wireless (NYSE:VZ) announced it had completed the world's first VoLTE call on a commercial network and said it would introduce VoLTE in 2012. The operator is expected to add VoLTE capability to its network later this year. Rival AT&T Mobility (NYSE:T) plans a 2013 launch of VoLTE. Sprint Nextel (NYSE:S) has indicated plans to launch VoLTE in early 2013, and its partner Clearwire (NASDAQ:CLWR) has said it will offer VoLTE when it launches its TD-LTE network by the middle of 2013. T-Mobile USA recently posted a job ad seeking a specialist in Voice over LTE.
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