Sunday, August 16, 2009

Voice over LTE - is it a good idea?

LTE or Long Term Evolution is the 4G technology that is anticipated to be available to US cellphone users sometime next year. All eyes are on this technology to deliver broadband speeds over the air anytime anywhere. Depending upon the cost there may not be an en masse adoption of the technology and maybe limited to enterprise customers. From a service provider perspective then the ROI may not materialize in the first 1-2 years.

Enter Voice over LTE. Cost senstivity is haunting 3G cell phone service as it now reaches maturity. For service providers, who either with limited spectrum positioning who are already choking on their 3G networks or elevating CapEx to continuously upgrade their RAN networks to push more voice users through them, it makes sense to move the voice traffic over LTE. For these operators it is critical then that the LTE equipment can be seamlessly integrated in their current RAN architecture as well as be compatible with the legacy 3G network.

I agree with one of my colleagues observation "for some service providers Voice over LTE is the only long term competitive edge especially if these service providers do not have a large base of customers willing to spend $$ to get high speed data services". Basically reduce cost to maintain or improve ARPU.

It remains to be seen which of the service providers will adopt and launch Voice over LTE as the challenges of maintaining circuit switched type voice service over a backbone IP network remains - maybe we can borrow a page from the history books as land line phone was (and still is) systematically displaced with VoIP.

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