Market Research Report
Voice over LTE: Market Analysis and Forecasts
|Published by||ARCchart||Product code||239816|
|Published||Content info||70 Pages
Delivery time: 1-2 business days
Carriers worldwide are seeking ways to improve the efficiency and capacity of their networks while minimizing costs and improving end-user experience. LTE has served this purpose well in terms of mobile broadband data access, but carriers are struggling to find solutions to fight declining revenues for voice services, the primary stream of revenue for most carriers. Voice over LTE (VoLTE) offers a potential solution. Not only does VoLTE offer unique advantages in lowering a carrier's voice infrastructure economics, but it also promises to improve voice quality, device battery life and user experience by allowing concurrent voice and data services over a single LTE radio interface.
VoLTE was first introduced in 2010 by the GSM Association (GSMA), and has been standardized by the 3GPP. Without VoLTE, carriers use their LTE network solely for IP data transmission and are forced to use their legacy 2G/3G infrastructure for voice communications. Essentially, VoLTE voice-enables LTE and allows concurrent usage of both voice and data on the same network.
Concurrent access of voice and data services over a single radio interface is of particular interest to CDMA carriers because unlike WCDMA/GSM, the CDMA standard does not support Circuit Switched Fallback (CSFB) technology. LTE subscribers on CDMA carriers are forced to concurrently use their LTE and CDMA radio interfaces, which drains battery life. As a result, CDMA operators will be early entrants to the VoLTE market.
The first VoLTE launch has been announced by MetroPCS in the US, which aims to commercially launch its VoLTE service in Q3'2012. This will be followed by a string of deployments worldwide, starting with the US and Asia Pacific markets. ARCchart forecasts that revenues generated from VoLTE services will reach $2 billion by 2016, representing a CAGR of nearly 390% between 2012 and 2016.
Commercial grade VoLTE is at a nascent state. Demand is being fuelled by carriers wanting to establish a native mobile VoIP solution, both for the long term economic benefits and to defend against the threat posed by OTT (Over the Top) VoIP providers such as Skype, FaceTime and Viber. However, ARCchart does not expect VoLTE will substantially stem the flow of voice traffic from carrier networks to OTT voice services, mainly because these OTT services are free of charge. Even if carriers impose restrictions on their subscribers' OTT usage, the migration of voice traffic will continue because as much as 70% of all OTT traffic is over Wi-Fi.