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Voice and video calling over LTE:

Exploring new voice opportunities for operators

Sponsored by

Contents
Executive summary..........................................................................................................................................4
In brief............................................................................................................................................................4
Market status....................................................................................................................................................4
Operators look to new services to drive mobile revenue growth.................................................................5
Market development.........................................................................................................................................5
When to VoLTE...............................................................................................................................................5
Drivers for VoLTE deployment.................................................................................................................6
VoLTE gaining traction worldwide...........................................................................................................7
Video (ViLTE) might take longer ...................................................................................................................8
VoLTE to drive RCS growth............................................................................................................................8
The VoWi-Fi factor..........................................................................................................................................8
VoLTE going into the mainstream....................................................................................................................9
Operators progressing towards full VoLTE...................................................................................................9
Commercial considerations for VoLTE implementation...............................................................................9
Operators pricing expectations.....................................................................................................................9
VoLTE across borders....................................................................................................................................10
Technical and commercial considerations..................................................................................................10
Conclusions and recommendations...............................................................................................................13

Copyright Ovum 2015. All rights reserved.


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2015 Ovum. All rights reserved. www.ovum.com

About the author

Nishi Verma Nangia


Nishi Nangia is a Senior Analyst with Ovum. She is a part of Service Providers & Markets team where she is responsible for
topical analysis of service providers strategies covering a range of topics including global mobile roaming, mobile data pricing
and service innovation, prepaid strategies, and loyalty.
Nishi has eight years experience in providing strategic insights to global telecoms and consulting firms. Prior to joining
Informa, she was Handsets Sector Lead at GfK in the UK, where she was responsible for advisory research and forecasting of
the global smartphone market. Before that, she worked as a Senior Analyst at Frost & Sullivan, covering the mobile service
landscape in India, and as Research Manager at Evalueserve in India and Chile, where she was responsible for bespoke
research on mobile markets in Europe and the Americas.
Nishi holds a bachelors degree in business and finance from India.

2015 Ovum. All rights reserved. www.ovum.com

Executive summary
In brief
Operators are increasingly looking towards new services to drive mobile revenue growth. Voice will continue to
remain relevant, but voice services, evolved into a broader context to include multimedia features, are expected to
gain momentum and enable operators to compete against the growing burden of OTT voice services. We already
see Voice over LTE (VoLTE) services gaining fast traction, with a slew of operators announcing VoLTE launches
or trialing VoLTE for their domestic markets. It will be equally important for operators to expand VoLTE services
across borders, in order to extend the same good quality of experience to their travelling customers. Many
operators are likely to implement international VoLTE within next 6-12 months.
1. Operators need to develop new voice opportunities and VoLTE will be a crucial step forward, in order to offer
an improved end-user experience. VoLTE, combined with rich communications suite (RCS), has the potential to
bring new opportunities for operators and to gain innovation leadership. This will be crucial to compete with the
OTT players and other network providers. In addition, VoLTE will bring spectrum efficiencies and opex savings for
operators through network consolidation.
2. The VoLTE ecosystem is getting there, with more than 80 operators in different stages of VoLTE deployment and
many others trialing the technology worldwide. Asia Pacific is one of the leading regions for VoLTE deployment
with operators in South Korea, Japan and Hong Kong having launched commercial VoLTE services. Operators in
the US are a close second with commercial VoLTE services already deployed across many markets.
3. As operators launch VoLTE services across their domestic markets, they will soon need to start thinking about
international VoLTE interconnection and roaming for international service continuity. International VoLTE could
be a significant opportunity for operators to gain the first-mover advantage; however, there remain the inherent
challenges of interworking and interoperability. Some of the recent trials showcasing cross-border VoLTE
implementations, such as China Mobile and KPN Mobile demonstrating IMS-based VoLTE roaming supported by
iBasis IPX, pave the way for VoLTE interoperability and commercial roaming deployments.
4. For VoLTE roaming, operators will need to remain flexible between home routing and local routing solutions. Local
routing can be a powerful solution for operators to offer an improved quality of service to roaming customers by
serving them through local operators. As local routing means that the VoLTE voice and Video over LTE (ViLTE) calls
will not need to trombone back to the home network, it will offer a better quality of experience at a reduced cost.

Market status

Over the last few years, LTE


deployments have accelerated

worldwide as operators look to


increase network capacity and
offer higher-speed data services to
their customers. LTE is the most
rapidly deployed wireless technology
today with 313 live LTE networks

worldwide at the end of 2014.


According to Ovums research,
there were another 143 LTE
networks planned, in deployment,
or in a pre-commercial phase at the
end of 2014.

Figure 1: LTE connections by region, 201319


North America
Middle East

Latin America
Africa

Western Europe

Eastern Europe

Asia & Oceania

2.5
Connections (billions)

Ovum has conducted extensive


research, which included an industry
survey with mobile operators and
MVNOs around their plans and
expectations on VoLTE and ViLTE.
There were a total of 108 respondents
to the survey, representing operators
from around the world. Asia Pacific
was particularly a strong region in
terms of operator responses, because
of the early success of VoLTE there.
In this whitepaper, Ovum presents
its survey findings on VoLTE market
opportunity for operators and also
highlights the inherent challenges
operators will face as they migrate
towards VoLTE.

2.0
1.5
1.0
0.5
0
2013

2014

2015

2016

2017

2018

2019

Source: Ovum

2015 Ovum. All rights reserved. www.ovum.com

The growth of LTE subscriptions


is fuelling data traffic growth, with
audio and video streaming and social
networking services driving data
usage. Mobile voice, on the other
hand, is witnessing a decline as there
is a growing shift of subscribers
away from traditional voice
services towards data-based voice
applications, such as over-the-top
(OTT) Skype and Viber applications,
and towards messaging services in
general. Even though mobile voice
still remains the biggest contributor
to overall mobile revenue, its share is
rapidly plummeting (see Figure 2).
As operators traditional voice
businesses are now being squeezed,
they need to evolve voice services to
compete against the growing burden
of OTT voice services. Also, operators
need to evaluate the costs of running
circuit-switched voice networks while
they develop new voice opportunities
for the future. Some of the operators
have already announced their plans
to close down 2G networks, including
Telstra in Australia and AT&T (both
expected to shut down their 2G
networks by end of 2016) and SingTel,
as they migrate their customers
towards high-speed LTE networks
and deploy VoLTE services.

mobile revenue growth over the next


few years, voted by a total of 57%
respondents as the top 1, top 2, or
top 3 services. This includes 36% of
the respondents who voted it as the
top 1 service (see Figure 3). Social
networking services are expected to
stimulate mobile revenue growth as
well.

services with presence and location


information, instant messaging, live
video, and file sharing across devices
and networks, is voted slightly lower,
by total of 30% of the respondents,
perhaps due to the complexities in
technology and standardization.

Voice services as we know today,


evolved to rich voice, (or VoLTE) are
expected to gain momentum, voted
by total of 38% of the respondents
as among the top services to drive
growth. Rich Communications
Suite (RCS), which combines voice

The push towards VoLTE is expanding


as it is expected to bring several
sizable benefits, including an
improved end-user experience and
spectral efficiency gains. But, of equal
importance, it can enable operators
to develop new differentiated service

Data

When to VoLTE

Voice

100
38

42

45

48

50

53

55

62

58

55

52

50

47

45

2013

2014

2015

2016

2017

2018

2019

80
60
40
20
0

Source: Ovum

Figure 3: Which services are expected to drive mobile network revenue growth over
the next five years?
Top 1

Top 2

Top 3

Audio and video streaming 36

15

Social networking applications 16

21

M2M 11

20

Mobile money/mobile wallet

Rich Communications Suite (RCS)

Video (ViLTE)

10

Traditional voice and SMS

14

15

Rich voice (VoLTE) 13

Operators look to new services


to drive mobile revenue growth
Ovums survey results show that
audio- and video-streaming services
are expected to drive maximum

Market development

Figure 2: Global mobile revenue, voice and data market shares, 201319

Share (%)

This rapid pace of LTE deployments is


driving an increasing number of LTE
connections worldwide. According
to Ovum research, there were 386
million LTE connections in total at
the end of 2014, and this number is
forecasted to grow at a compound
annual growth rate (CAGR) of 43%
between 2014 and 2019 to reach 2.3
billion (see Figure 1).

17

16

9
17
8

Any other 2 1 3
0

10

20

30
40
Respondents (%)

50

60

Source: Ovum

2015 Ovum. All rights reserved. www.ovum.com

propositions. Some operators,


particularly in Japan, South Korea,
and the US, are embracing VoLTE
and pushing towards full VoLTE
deployment in order to differentiate
their services and to compete against
OTT providers and other network
operators.

deployments, while the impression is


that VoLTE by itself does not promise
any immediate incremental revenue
for operators.
As a result, some of these operators
are planning to introduce VoLTE
with other services, such as RCS,
to provide an overall enhanced
voice and data experience to their
customers. While others might
prolong their use of circuit-switched
fallback (CSFB) as an interim
solution to route voice calls on their
2G/3G networks rather than the
LTE networks, until they feel the

A few operators on the other hand


have concluded that there is no
business case for immediate VoLTE
deployment and are regarding VoLTE
as a mid-to-long-term migration.
The reason is simple: Full VoLTE
requires expensive and complex IMS

Already
deployed

In <1 year

In 1-2 years

In 3-4 years

No plans/
Not decided

VoLTE

16

32

32

10

Video (ViLTE)

10

37

13

36

RCS

Figure 4: What is your timeline for domestic launch of the following services?

15

21

46

timing is right for VoLTE. However,


these operators should seriously
consider the advantages that VoLTE
can bring versus the risk of waiting
too long to deploy it. The longer
they wait, the bigger the impact on
their competitive position, and the
more difficult it will be to recapture
market share.
Ovums recent survey of mobile
operators and MVNOs shows that
16% of respondents have already
launched VoLTE services with
almost an additional third of the
respondents planning to do so within
a year (see Figure 4). Another third of
respondents are planning to launch
VoLTE services in the next one-to-two
years. However, 19% of respondents
say that VoLTE will take longer or
they have no plans for it as yet.
There remains a dichotomy between
developed and emerging markets
over the commercial deployment
of VoLTE. Operators in mature LTE
markets are progressing fast towards
LTE while operators in emerging
markets are taking a slightly cautious
approach towards it, focusing first
on LTE coverage and overall data
adoption among customers.

Drivers for VoLTE deployment

Respondents (%)

VoLTE is attractive to operators for


many reasons. One of the primary

Source: Ovum

Figure 5: What are the major drivers for you to deploy VoLTE?
1= Extremely important

5= Unimportant

Improved customer experience (better quality, faster


call setup, more battery life) to compete against
OTT voice offerings

45

Simultaneous use of voice and video to develop new


revenue opportunities

36

30
27

Spectral efficiency gains


Better voice call quality to compete with
other operators

22
20

Opex savings through network consolidation


0

20

36
30

14

16 3
13

23
38

16

22
44

40
60
Respondents (%)

17
80

13
9

5
6
9
100

Source: Ovum

2015 Ovum. All rights reserved. www.ovum.com

advantages is that it will improve the


end user experience through better
voice quality and faster call set-up
times. SK Telecom, for example,
says that VoLTE offers better voice
quality and has a lower call-setup
time: "0.252.5 seconds compared
with five seconds on 3G, as reported
by the CTO during LTE event in 2013.
The operator is promoting VoLTE as
a way to boost customer loyalty. This
is validated in our survey as 45% of
the survey respondents agree that
improved customer experience is an
extremely important driver for them
to deploy VoLTE to compete against
OTT voice offerings (see Figure 5);
another 36% think it is an important

LTE is significant. However, it is


not clear yet whether operators
can monetize these opportunities.
This is partly because OTT players,
such as Facebook and WhatsApp,
already offer these services and
end users are happy with them so
far. And traditionally, as we know it,
subscribers by and large have been
reluctant to pay for new services, but
rather expect them to be bundled
into their existing plans. But this
will still be crucial for operators, to
develop new service opportunities
and create user value, in order to
compete against OTT players.

driver.

operators is the spectral efficiency


gains that VoLTE can bring for them.
VoLTE can allow operators to deliver
voice services far more efficiently,
in terms of spectrum usage. VoLTE
can optimize spectral efficiency of
mobile voice, and operators can
use the spectrum savings for data
services, perhaps by re-farming
their 2G/3G spectrum for LTE data
services. A total of 57% of the survey

VoLTEs simultaneous use of


voice and video paves the way for
new opportunities. 30% of survey
respondents consider this as an
extremely important driver for
VoLTE and another 36% consider
it as important. For operators, the
potential to combine voice with
video and multimedia services over

respondents consider it an extremely


important or an important driver for
VoLTE.

VoLTE gaining traction worldwide


In terms of VoLTE launches, most
of the mature LTE markets are
fast progressing towards VoLTE.
Worldwide, more than 80 operators
across 42 countries are in different
stages of VoLTE deployment with
many others trialing the technology.
South Korea is the worlds most
advanced market with all its
operators offering VoLTE-based
services, followed by the US (see
Table 1).

Another important consideration for


According to Ovum analysis, 2015
is expected to witness a strong
trajectory for VoLTE launches. The
following operators have already
announced their commitment to
launch commercial VoLTE services
in 2015: Taiwan Mobile, SFR France,
EE UK, T-Mobile in Germany and
in Czech Republic, Vodafone in
Germany, Spain and Netherlands,
Telefonica in Spain and Germany.

Table 1: Operators VoLTE launches, by region, 4Q14


Region

Country

Operator

VoLTE Launch

LTE Launch

Americas

US

AT&T

May 2014

September 2011

US

T-Mobile USA

May 2014

March 2013

US

Verizon

September 2014

December 2010

South Korea

SK Telecom

August 2012

July 2011

South Korea

LGU+

August 2012

July 2011

South Korea

KT

October 2012

January 2012

Hong Kong

CSL

May 2014

August 2011

Hong Kong

Three

May 2014

May 2012

Japan

NTT DoCoMo

May 2014

December 2010

Singapore

SingTel

May 2014

June 2012

Singapore

StarHub

June 2014

September 2012

Japan

KDDI

December 2014

September 2012

Denmark

TDC

November 2014

October 2011

Romania

Vodafone

November 2014

November 2012

UAE

Du

August 2014

June 2012

Asia Pacific

Europe

Middle East
Source: Ovum

2015 Ovum. All rights reserved. www.ovum.com

Video (ViLTE) might take longer

will need to be more innovative in


developing differentiated voice and
service propositions. Also, operators
will need to clearly define commercial
models for ViLTE, to be able to
generate incremental revenues
through it.

High-speed LTE networks are leading


to a burgeoning demand for video
calling services. Almost a quarter of
the survey respondents voted ViLTE
as their top 1, top 2, or top 3 service
to drive mobile revenue growth over
the next few years (see Figure 3).
This is an opportunity for operators
to offer a high-quality voice, video,
and rich multimedia experience
to end users, in order to compete
against the likes of Skype and Apple
FaceTime. In addition to the quality of
experience, ViLTE will allow operators
to provide security and flexibility that
the OTT video apps cannot guarantee.
For example, SK Telecom offers its

customer experience voted by a


total of 47% of the respondents.
RCS calls for operators to invest
in developing new IMS-enabled
services, such as Presence and
Geolocation Exchange. To support
these new services, operators
will need to upgrade their OSS
and BSS with no guarantee as yet
that customers will actually use
those services. A worrying 55% of
the survey respondents have only
long-term plans or no plans at all
for launching RCS (see Figure 4).
According to Ovum analysis, a mature
device ecosystem and revenue
monetization opportunity through

VoLTE to drive RCS growth

The survey results indicate that,


while the momentum behind VoLTE
is positive, the same is not as true
for RCS: Only 9% of the respondents
have launched it (see Figure 4).
Previously, operators have been
slightly disappointed with the uptake
of GSMAs RCS initiative (called
Joyn), since its introduction in 2012.

customers attractive group audio and


video calling and other multimedia
services over its LTE network. The
key strategy for SK Telecom, as
stated by one of the senior managers,
is to keep its users hooked on to its
network for a differentiated service
and carrier-grade QoS versus the
best-effort approach of OTT players.

However, today, there are around


41 operators across 32 countries
with live RCS implementations, and
this is expected to more than double
in a years time with a total of 87
operators now committed to launch
RCS by the end of 2015.

APIs, advertising, etc. can help RCS


gain faster momentum. For 2015,
Verizon, AT&T, China Mobile, and a
few other operators are scheduled
to launch RCS-based messaging and
voice services, combining them with
their VoLTE services. This is expected
to be a bellwether for the future of
RCS as Ovum expects 2015 to be the
final make or break year for RCS.

RCS combined with VoLTE can bring


new opportunities for operators and
enable them to compete against OTT
players. It was rated by a total of
61% respondents as the top driver
for launching RCS, with 41% rating
it as the number one driver and the
other 20% rating it as the number
two driver (see Figure 6). The survey
respondents also believe that RCS
is important to enhance the overall

Operators are optimistic about


ViLTE as almost half of the survey
respondents say they plan to launch
ViLTE within two years while 5% of
the respondents have launched it
already (see Figure 4). However, for
ViLTE to become a mass-market
phenomenon, it will require full
service standardization and operators

The VoWi-Fi factor

Ovums survey results show that


operators are positive about VoWiFi
services: 44% of the respondents plan
to launch it while 5% say they have
launched it already (see Figure 7).
One of the key reasons for operators
to consider VoWiFi is to lower their

Figure 6: What do you think are the top two drivers for operators launching RCS?
Top 1

Top 2

Combined with VoLTE, to compete against


OTT players
To enhance the customer experience with rich
communication services

11

36
20

Network convergence and all-IP transformation


14
14
14

Competition from other operators


As a standalone service, to compete against
OTT players
Any other

0
0

41

20

23

3
5

10

15

20
25
Respondents (%)

30

35

40

45

Source: Ovum

2015 Ovum. All rights reserved. www.ovum.com

the question of operators technical


readiness; it also reflects their
commercial priorities.

Figure 7: Do you plan to launch VoWiFi service for your customers?


Already deployed
5%

Operators progressing towards


full VoLTE

Undecided
42%

As operators recognize the benefits


of VoLTE, they are adopting interim
solutions for 2G/3G voice and VoLTE,
while evaluating the costs and
infrastructure requirements for full
IMS-based VoLTE. Table 2 highlights
the different interim approaches to
migrating to full LTE voice and data.

Yes
44%
No
9%

Source: Ovum

Table 2: Interim approaches for operators to migrate to full VoLTE


Approach

Description

Pros

Cons

Simultaneous Voice
and LTE Data (SVLTE)

Mainly for CDMA operators


Two radios to run LTE data service
and circuit-switched voice service
over a CDMA2000 network

Ensures 2G/3G voice


benefits along with
simultaneous voice and
data sessions

Potentially
negative impact on
device battery life

Circuit-Switched
Fallback (CSFB)

Using 2G/3G networks for voice


LTE user switched back to 2G/3G
radio network for making or
receiving calls and is reconnected
with the LTE network after the call

Ensures 2G/3G voice


benefits

Call set-up time


is high and it
does not offer
any network
efficiencies

Single Radio Voice


Call Continuity
(SRVCC)

For spotty LTE coverage


A single radio in the device, uses
VoLTE for calls in LTE coverage,
and is switched back to 2G/3G
voice when outside LTE coverage

Maintaining call
continuity for VoLTE
and 2G/3G voice; offers
seamless handover with
single device radio for
improved battery life
over CSFB

Call quality could


suffer when
switched back to
2G/3G; current
limited device
availability

Commercial considerations for


VoLTE implementation
The survey respondents were asked

Source: Ovum

capital expenditure on VoLTE network


rollout and use VoWiFi for in-building
coverage to improve customers
overall voice experience. Some
operators have already announced
their plans to launch VoWiFi services;
for example T-Mobile and Sprint in
the US and EE and 3 in the UK.
However, 42% of survey respondents
say they are undecided about VoWiFi.
The operators do see the benefit
of voice handover between LTE
and Wi-Fi networks. However, the
service quality remains a question
and many operators are taking a
cautious approach towards VoWiFi.
For example, AT&T says that VoWiFi
will simply complement the existing
3G and VoLTE network and it is in
no rush to launch it as an additional
calling option. In addition, the device

support for VoWiFi is still quite


limited; although it might be kicked
off soon by Apples support for VoWiFi
in iPhone 6.

VoLTE going into the


mainstream
VoLTE is now gaining momentum and
more operators are announcing plans
to launch VoLTE services, including
EE, TDC Denmark, Bouygues
Telecom, Deutsche Telekom, Telstra,
and Softbank Mobile. According to
Ovum analysis, 2015 is expected
to witness a strong trajectory for
VoLTE launches worldwide. The
survey results show that 64% of the
respondents plan to launch VoLTE
services over the next two years and
16% have launched it already (see
Figure 4). But the launch is not just

to evaluate a number of aspects for


VoLTE implementation. Providing
the highest level of QoS was rated
by 83% as important, with 41%
seeing it as extremely important (see
Figure 8): QoS is important because
VoLTE enables operators to offer
high-quality differentiated HD-voice
experience to their customers with
lower call set-up times. Maintaining
current voice capabilities also scored
high among respondents with 33%
scoring it as extremely important
and another 33% as important. This
is a key differentiation as VoLTE can
support existing call functions, such
as emergency calls, compared with
the OTT propositions.
Another important aspect is the
flexibility to adapt to changes in
charging models with 31% of the
respondents rating it as extremely
important and an equal percentage
rating it as important.

Operators pricing
expectations

The majority of VoLTE operators are


accounting for VoLTE within their
customers voice allowances without
any premium over basic 2G/3G voice.
The survey findings show that 72%

2015 Ovum. All rights reserved. www.ovum.com

Figure 8: For VoLTE implementation, which of the following aspects is most important to you?
1= Extremely important

5= Unimportant

Providing the highest level of QoS

41

Maintaining current voice capabilities


(e.g. emergency calls)

42

33

Flexibility to adapt to market changes


in charging models

33

31

31

28

Protecting roaming revenue streams

17

40

60

5
9 3

14

45

20

19

47

25

Time to market

25
27

25

Minimizing complexity

20

13

19
80

9
9

5
100

Respondents (%)

Source: Ovum

of operators expect VoLTE voice to


be charged on per-minute basis to
end users (see Figure 9). However,

Figure 9: What is your expectation for LTE voice and video calling pricing models for
end users?
Per minute

as customers are now becoming


accustomed to unlimited voice plans,
the per-minute charging might
become tricky, indicating a possible
shift in how operators charge for
voice itself.
On the other hand, the operators
opinion seems to be mixed on
VoLTE video (ViLTE) pricing: 44%
respondents expect it to be charged
the same as VoLTE voice (i.e. on
per-minute basis), while 56% expect
capacity-based pricing for video calls.
For VoLTE pricing, one of the
key challenges for operators is
undefined VoLTE interconnection
regimes. This will be crucial and
operators will need to remain
flexible and experiment with
different charging models in order to
succeed with their VoLTE ambitions.

VoLTE across borders

As operators are currently launching


VoLTE services for their domestic
customers, they will soon need to
start thinking about international
VoLTE interconnection and roaming
for international service continuity.
The Ovum survey data indicates
that almost half of the respondents

Capacity based

56%

72%

28%

44%

VoLTE voice pricing

VoLTE video pricing

Source: Ovum

intend to launch VoLTE for


international interconnect and for
roaming within 6 to 12 months of the
domestic VoLTE launch. And more
than a third of the respondents plan
to launch VoLTE for international
interconnect within the same time.
International VoLTE seems to be
a lower priority for the majority of
operators at the moment. The reason
is simple: operators would want to
start small and gain success in their
domestic markets first, then move
on to regional and global markets.
Once operators start achieving
momentum on their domestic VoLTE,
and by the time the complexities of
interoperability, handset availability
and commercial models are resolved,
international VoLTE will become
a higher priority for operators.
However, there could be a significant

opportunity for operators that


implement international VoLTE
sooner rather than later, in order to
gain the first-mover advantage.
For a fair majority of the respondents,
international VoLTE interconnection
and roaming could take anywhere
between six months to up to two
years. Or it might even take longer
than two years for a small number
of respondents (11% for VoLTE
for roaming and 8% for VoLTE for
international interconnect).

Technical and commercial


considerations

As with any new technology, VoLTE


brings potential teething problems.
Ovums survey results indicate that
operators consider interworking and
interoperability to be a major challenge
for VoLTE implementation, voted by

2015 Ovum. All rights reserved. www.ovum.com

10

Figure 10: How soon after you have deployed VoLTE in your domestic market will you support it for international interconnect and roaming?
VoLTE for roaming

5%

VoLTE for international interconnect

14%

Immediately

28%
Within 6 months

19%

22%

11%

6-12 months

12-24 months

14%

19%

8%

Longer than 24 months

27%

Not in our current plans

19%

16%

Source: Ovum

Figure 11: What do you think are the major challenges for domestic and international VoLTE implementation?
Domestic VoLTE

International VoLTE
72

Interworking/ interoperability issues between operators


53

Roaming complexities

56
53

Commercial models not well-defined yet


Additional billing and charging complexities between operators

38

Reach/coverage

39

22

IMS platform implementation


Any other
0

23

8
20

88

69

44

34

40
60
Respondents (%)

80

100

Source: Ovum

72% respondents as a challenge for


domestic VoLTE while a whopping 88%
vote it as a challenge for international
VoLTE (see Figure 11).
It is only recently that operators
have started to talk about VoLTE
interoperability. For example, in
June 2014, China Mobile and KT Corp
demonstrated the first cross-border
VoLTE trial which was soon followed
by an IMS Local Breakout with home
routing trial for VoLTE roaming calls
between China Mobile and KPN
Mobile in October 2014 (using iBasis
and China Mobile International as
IPX Providers). In November 2014,
AT&T and Verizon announced their
plans to work towards achieving
VoLTE interoperability for their
domestic customers. While these

technology trials and operator


agreements pave the way for VoLTE
interoperability and commercial
roaming deployments, it might take
some time for operators to resolve
the interoperability issues. Seamless
interworking/interoperability will
be crucial for transnational VoLTE
success, as previously experienced
with the adoption cycle of SMS.
Similar to LTE roaming, VoLTE
roaming standards provide home and
local routing options for operators
to consider. Local routing is the
mechanism where VoLTE traffic does
not travel back to the home network
but is handled by the local operator
in the visited market instead. Local
routing could be a powerful solution
for operators to offer an improved

roaming quality of service to their


outbound roamers, by serving them
through the local operators. This
becomes crucial for delay-sensitive
applications such as LTE voice and
video calls in roaming. As the calls
will not need to trombone back to
the home network (as in the case
of home routing), a local routing
solution can offer better call quality
and experience, at reduced costs.
While 12% of the survey respondents
said that they plan to use local routing
for VoLTE roaming and 22% choose
home routing, two-thirds said they plan
to use both local and home routing for
VoLTE roaming (see Figure 12). It gives
operators more flexibility to be able to
choose between home or local routing
depending on their customers needs

2015 Ovum. All rights reserved. www.ovum.com

11

and SLAs, their roaming partners


technical readiness, or simply the
service/application requirement.
In terms of the locally routed roaming
traffic, almost half of the survey
respondents say that between 10%
and 20% of their VoLTE roaming
traffic would benefit from being locally
routed (see Figure 13). Another 14%
of respondents say that it will be more
than 20%. This is very positive as it
appears that operators do recognize
the benefits they can realize through
local routing. However, 38% say local
routing would benefit less than 10% of
their VoLTE roaming traffic.
Another key challenge for VoLTE
is commercial models (see Figure
11). Commercial models need to be
standardized as 56% of the survey
respondents rate it as a challenge for
domestic VoLTE and almost an equal
53% for international VoLTE. Policy,
billing, and charging issues need to
be resolved as well, for VoLTE to gain
traction. LTE reach and coverage also
pose a barrier for both domestic and
international VoLTE implementation.
It will take some years to have
ubiquitous national and global LTE
coverage, while there remain a few
other challenges for operators to deal
with for VoLTE.
Under local routing, loss of
subscriber control and unpredictable
QoS from foreign networks are some
of the key concerns for operators.
In addition, unclear wholesale
settlement between home and visited
operators is expected to be a big
challenge: 34% of the respondents
rate it as a high concern while
another 36% rate it as their number
two concern (see Figure 14). Although
many operators do plan to charge
VoLTE on retail per-minute basis,
some operators are open to different

Figure 12: Do you plan to use a local routing (by visited network) or home routing for
VoLTE roaming?
Local routing
12%

Home routing
22%

Both local and


home routing
66%

Source: Ovum

Figure 13: From a quality standpoint, what percentage of your VoLTE roamers traffic
do you think would benefit from being locally routed?
More than 20%
14%
Less than 10%
38%

Between 10% and 20%


48%

Source: Ovum

Figure 14: What do you think are the key concerns for operators under the local
routing model?
1 = Highest concern

5 = Lowest concern

Loss of subscriber control


to foreign networks

45

Unpredictable QoS from


foreign networks

38 5

42

Unclear wholesale
settlement between home
and visited operators

38

34

Implementation costs for


local routing

36

23
0

20

60

11
20 3

44
40

8 5

23
80

8 2
6
8 2
100

Respondents (%)

Source: Ovum

charging mechanisms and flexibility.


Wholesale agreements need more
standardization which the industry
will need to work through.
One of the other major concerns for
operators under the local routing
model is the cost of implementing
it, voted by 23% of the respondents

as a high concern while another


44% rate it as their number two
concern. Weighing the advantages
of local routing with the cost of
implementation will be crucial for
operators to make a sound decision.
Vendors will need to come up with
innovative solutions, to minimize
these costs.

2015 Ovum. All rights reserved. www.ovum.com

12

Conclusions and recommendations


In most of the mature LTE markets, mobile operators are fast embracing VoLTE for all the diverse benefits it
brings, including spectral efficiency gains and cost savings from network consolidation. These benefits, combined
with the potential to develop new service opportunities, provide a solid foundation to operators, even in emerging
markets, to seriously consider VoLTE. Overall, there is growing momentum for VoLTE, as operators weigh the likely
gains against the technical and commercial challenges.
Operators should consider launching VoLTE sooner rather than later. VoLTE is not only enhanced high-definition
voice but is much more in terms of new multimedia experience for customers. And for all the pressure that OTT
players are putting on operators voice businesses, VoLTE is a logical step for operators, to be able to develop new
differentiated service propositions. Full VoLTE does require careful consideration with complex IMS deployments.
However, the risk of waiting too long may prove more costly for operators and rather benefit OTT providers.
Operators should combine VoLTE with RCS to make the most of the IMS infrastructure investments. VoLTE is an
opportunity for operators to capitalize on RCS voice and video capabilities, both sharing same IMS investment.
As VoLTE gains more traction and drives operators to invest in IMS deployments, operators should exploit RCS
capabilities to get more worth from their IMS investments.
Operators should evaluate new pricing models but focus on service differentiation more than price. VoLTE
and RCS, as part of broader strategy to enhance customers service experience, can allow operators to gain
competitive edge in the market. Operators should focus on providing compelling services and differentiated
experiences in a way that customers are happy to pay a premium. However, operators should remain flexible with
pricing and carefully evaluate different charging models, in order to stimulate VoLTE usage.
Operators should prepare their networks for a first-mover advantage for International VoLTE. As operators
launch VoLTE services in their domestic markets, they should prepare their networks to extend the same user
experience to their roaming customers as well. Recognizing the benefits of local routing for VoLTE roamers,
operators will need a flexible roaming solution to realize those benefits. International VoLTE could be a significant
opportunity for operators, to provide strong service and quality differentiation to end users.
Operators should partner with right technology vendors that can support them in their migration towards
VoLTE. Technology vendors can help operators overcome the technical challenges associated with VoLTE, so they
can focus on commercial strategies and service development. This will be crucial for operators as the vendors
have the right expertise and skills to manage the coverage, signaling and interworking complexities, for smoother
domestic and international VoLTE rollouts. And it will allow operators to strengthen their technology position.

2015 Ovum. All rights reserved. www.ovum.com

13

ABOUT OVUM
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ABOUT IBASIS
A wholly-owned KPN company, iBasis is a leading international voice carrier and provider of value-added services for
mobile operators. The company offers a comprehensive portfolio of voice termination and data services, including
messaging, signaling and roaming, for many of the worlds largest fixed and mobile operators, as well as OTT service
providers.
iBasis International LTE Services Solution
iBasis offers mobile operators the shortest route to securing LTE revenues and achieving a global LTE footprint. The
iBasis LTE services use the iBasis multiservice IPX for guaranteed and differentiated quality for all services. A single point
of access provides operators entry to iBasis 4G (LTE) signaling network, with Diameter Routing Agents on all continents
for maximum service quality and more than 175 LTE destinations in more than 80 countries. iBasis LTE solution includes
Diameter signaling, data roaming and VoLTE interworking and roaming, combined with the InVision advanced monitoring,
troubleshooting and reporting tool. iBasis also offers a robust trial environment for testing LTE signaling and data roaming
and VoLTE scenarios.
Find out more about iBasis at www.ibasis.com