The provision of data access is now the most important part of a mobile operator’s business and some may decide in the future that offering voice services does not make economic sense. So says industry consultancy Northstream in a recently released white paper.
In the paper, entitled ‘LTE – The Bigger Picture’, Northstream says that, as GSM networks come to the end of their life, and operator are faced with investment in solutions designed to enable voice over LTE, some may opt to relinquish voice provision. “Wireless data is the core business of a mobile operator,” the firm says.
“It appears clear that the telcoms industry has agreed on using IMS and MMTel (Multimedia Telephony) as a standard for voice over LTE,” the firm continues. “Sooner or later, operators must decide whether to invest in voice, or whether to slowly exit the voice segment as GSM networks approach their end of life. Some operators may conclude that LTE voice revenues do not justify the the related costs and uncertainties.” Northsream cites the cost of service platforms, RCS solutions, device software, handset subsidies and customer service as factors that may act on operators’ decisions.
Furthermore, the firm says, online service providers including Skype, Google and Facebook are planning or already making forays into the voice market, with a view to offering richer services than the basic voice that operators are used to providing. Such services include contact management, presence, messaging and video calling, the firm says, adding: “This raises the bar for operators to deliver a service that today’s mobile voice is just a small part of.”
If this makes uncomfortable reading for operators, Northstream is not interested in softening the blow.The firm argues that operators should accept their place in the value chain, and not try to compete with superior organisations in the area of service provision. “The level and speed of innovation originating from online service providers is too massive for operators to offer serious competition on the service level, even in markets where operators continue to dominate mobile service delivery.”
Will regulators ever be able to catch up with the rate of change in the telco/tech industry?
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