VoIP need not always be a threat, indeed for cellular operators it represents an opportunity. So argues a report from market research firm, Sound Partners. "In ten years’ hence VoIP won't be the dominant way [voice calls are made] but it will be getting there," says Sound Partners' CEO, Alastair Brydon.
Cellular cannot deliver mass market VoIP services: it does not have the throughput and voice quality would be unacceptable due to packet delays. But this is about the change with the launch in the U.S. this year of CDMA2000 1 x EV-DO Revision A which has hooks for VoIP. Europe will have to wait till 2009 with the introduction of the 3G Long Term Evolution (LTE) standard.
Operators will invest in 3G LTE for such services as Internet access and mobile TV services, with VoIP being one more offering. "A 3G LTE network using VoIP will be 28% of the cost of today's network," says Brydon.
Other benefits going to IP include the reduced cost of a single core network for fixed and mobile traffic compared to a separate circuit switched network for voice, and richer services by mixing voice with multimedia content. Since the trend for traffic is to move from fixed to mobile, all the carriers have to do is manage the transition to VoIP correctly, says Brydon.
And the opportunity? "If it is plain voice, everyone is squeezed but VoIP can be offered as a premium service," he says. Such a service would include superior voice quality as well as instant messaging, presence and multimedia.
Sound Partners forecasts that cellular VoIP will account for 49% of all cellular minutes in 2015 and generate revenues of U.S. $70.9 billion. In Western Europe it will be 33% of all cellular minutes and $54.7 billion revenues.
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