Cellular VoIP to take market by storm

The evolution of mobile network technology will mean that revenues from cellular VoIP services will have overtaken those on fixed lines by 2012, according to industry experts.

Research house Analysys predicts that cellular VoIP services will generate revenues of $18.6bn (£10bn) in the US and $7.3bn in Western Europe by 2012, compared with fixed VoIP revenues of $11.9bn and $6.9bn respectively.

The driving force behind cellular VoIP adoption will be the upgrade of cdma2000 1x EV-DO to Revision A from 2007 and the upgrade of WCDMA/HSPA networks to Long Term Evolution (LTE) from 2010. These technologies will be the deciding case for mobile operators to migrate their voice services from circuit-switched voice to voice over IP, Analysys claims.

“The capacity, cost per megabyte and quality of service of existing 3G cellular technologies – including EV-DO Revision 0 and HSPA – are not yet adequate to support a significant move to wireless VoIP services,” said analyst Mark Heath. “However, EV-DO Revision A and 3G LTE will respectively create the cost benefits and new service opportunities that trigger the migration to mass market cellular VoIP.”

In order to further stem the erosion of voice prices, Analysys also anticipates that mobile operators will position cellular VoIP as a premium service, emphasising the quality of service and value added features such as presence and instant messaging.

But the transition to cellular VoIP will be largely successful – by 2015, cellular VoIP will carry 28 per cent of all fixed and mobile voice minutes in the US and 23 per cent in Western Europe, Analysys forecasts. Meanwhile, VoIP over local wi-fi and VoIP over broadband wireless access will be relegated to niche roles.