As voice becomes commoditised, carriers are looking for new services, not replacement ones, says Broadsoft CTO Scott Hoffpauir. And voice over LTE (VoLTE) will be the game-changer in a fragmenting market, allowing carriers to utilise an all-IP environment to roll out new and compelling services alongside voice.

June 23, 2011

7 Min Read
VoLTE will be a game-changer in unified comms

As voice becomes commoditised, carriers are looking for new services, not replacement ones, says Broadsoft CTO Scott Hoffpauir. And voice over LTE (VoLTE) will be the game-changer in a fragmenting market, allowing carriers to utilise an all-IP environment to roll out new and compelling services alongside voice. “When we talk about things like voice services, a lot of people are thinking about the handset,” says Hoffpauir. “But when we talk to the operators, what they’re looking for is new services.”

Independent telecoms analyst Martin Geddes says that, in a market where voice is becoming “Google-ised”, its value is changing. “If you measure by minutes, you’re using the wrong metric,” he says. According to Geddes, it’s “moments of business efficiency” that count, not megabytes. “The way voice is used in business is changing, there are new patterns for using voice for productivity,” he says.

Both Geddes and Hoffpauir were speaking at a roundtable on voice over LTE (VoLTE) in London this week, at which various industry figures spoke about the technology’s coming impact on carrier strategies in tackling issues such as over-the-top (OTT) players, unified communications and changing enterprise communications requirements.

For Geddes, carriers are in a vulnerable and a powerful place at the same time; “It’s not really about the pipes, the world is moving beyond metred minutes and it’s hard for telcos to compete with that,” he says. Geddes says that, with a market fragmenting at the application and delivery layer, VoLTE is one good way of delivering the applications and services that could reap dividends for carriers in the future. “The challenge is matching up the delivery mechanisms to the use cases and doing it well,” he says. “Whoever captures the mass of end users is in a very powerful position to offer rich communications services to enterprises that want to talk to their customers. And I’m not talking about advertising, it’s about billing, payments, customer service, authentication and other business processes.”

That’s exactly the sort of area that companies like Broadsoft are seeking to do business in. As Hoffpauir puts it, “If an operator doesn’t supply the value-added services, someone else will,” and VoLTE is a means to that end. For Hoffpauir, video conferencing/calling will form an increasing part of that landscape. Responding to observations that just about every year for the past decade has been “the year of video calling”, Hoffpauir pointed to the growth of the tablet market as a key driver in changing the relationship  between telcos and the enterprise market, which both he and Geddes believe is where the VoLTE opportunities lie for carriers, at least in the short term.

“People in our industry are definitely a little cynical about video,” says Hoffpauir, “but our recent experience has been that tablets are making it a more affordable option now and the experience users get with video is very different from what you get with voice calling. I think the mistake people make is that they look at video calling as a voice replacement – it’s not, it’s something new.”

“With LTE, there’s an opportunity there to do more with tablets and video calling, high-definition video conferencing and assigning numbers to these devices,” says Hoffpauir, who believes that number assignation will have a significant impact on the use of tablets in an LTE environment. “Most video conferencing services are closed at the moment. Operators have the opportunity to leverage more of an open environment.”

Hoffpauir says that one of the greatest payoffs from VoLTE will come in the form of carrier interoperability in the form of GSMA standards. He envisages a scenario in which carriers will offer a base VoLTE service overlaid with branded services and applications that can “leverage the user experience of devices, which is something we haven’t seen yet.” Despite the richness of user experience in and around identity, presence and address-book features, Hoffpauir says the old-fashioned phone number will continue to be the prime way in which people identify each other when VoLTE goes mainstream. “There’s still a lot of power in the phone number,” he says. “Just in terms of portability, which most countries allow for…it’s well understood and you can move around with your number in a way that’s simply not possible with, say, a Skype ID or email address.”

With VoLTE, Hoffpauir says that number assignation on tablets will drive uptake and interoperability for high-definition video calling. At the moment, he says, video-calling requires users to be on the same service, whether that’s OTT like Skype or a proprietary, enterprise-based system. “What we’re seeing now is a lot of push now to use the phone number, just like for any call, but enabled with video calling,” he says. “That will allow carriers to sell something new – a user may already have a smartphone, so now they can offer them a tablet with a subscription to video calling and conferencing.” Hoffpauir says that, as the technology available on handsets and tablets has improved, so too has the opportunity for operators to offer video without incurring too much cost, saying it’s a small increment that opens up a lot of opportunities.

As for the perceived threat from Skype, both Hoffpauir and Geddes believe that, from an enterprise-provision perspective at least, it’s unlikely to be much of an issue for carriers, largely thanks to the role of quality of service as a differentiator. “Quality of service on Skype over 3G is a problem for business users,” says Hoffpauir, who says that these users have service expectations that don’t cost carriers a lot to meet but users would be willing to pay a premium for.

Geddes sees Skype as part of a much bigger picture in which carriers need to learn to “work with the reality” that customers want to communicate with as many people as possible using whatever means necessary. “The question is, how do you work with that to offer carious forms of transport that fit the needs of different applications and different pricepoints. Skype may be a way of segmenting out from that and isn’t necessarily a threat to the operator.” Geddes views a carrier trend towards pushing OTT offerings off networks as a foolish exercise.

For Geddes, voice is “becoming a little spice on top of something else; rather than being the cake or the icing, it’s the cherry.” He points to complete communications and productivity applications like CRM or Salesforce that may have a voice component to them as an example of how the role of voice is shifting and changing. Hoffpauir says that enterprises are increasingly looking to integrate real time voice communications into their enterprise applications and that operators are well positioned to do this because they have control over both access and devices. “Operators could provide a set of value-added unified communications services in the cloud, over which they could exercise a good degree of control,” he says. “Companies wouldn’t have to worry about whether or not their new LTE phones integrated with the PBX at the office.”

As far as both men are concerned, VoLTE will be a game-changer for both carriers and unified communications vendors. As Geddes says, “there was a time in the market where, whatever your question was, the answer was ‘telephony.’ Now we’re seeing  it fragmenting into difference scales and scopes, there’s a lot of opportunity to build solutions but the assumption that end-users can be forced to use a specific voice application is simply not true.” Hoffpauir sums it up as being all about IP: “It makes integration with mobile communications much simpler because it’s all IP – it all looks the same whether it’s a mobile device, a desk phone or a tablet. There’s an opportunity there for operators to have a very competitive proposition over what traditional PBX providers are offering today.”

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