The Future of Voice is Here: VoLTE

The arrival of voice-over-LTE (VoLTE) technology has been buzzed about by carriers for several years now, but at the Policy Control and Data Pricing 2014 conference in Berlin, it became very obvious that the VoLTE future is no longer on the horizon: it’s here.

“The window of opportunity is now,” urged Alex Harmand, head of service platforms for Telefonica. Telcos are heeding that call. Approximately 10 percent have some of form of VoLTE service in place, and according to the GSMA, 20 more VoLTE deployments are expected this year alone.

VoLTE is happening now, and fast; however, CSPs still have many questions about their approach to the technology. For one, policy control and charging rule function (PCRF) solutions are needed for each voice call in VoLTE. Are CSPs designing their VoLTE architecture by implementing a common or dedicated PCRF?

What’s more, how can CSPs make sure the voice user experience is superior to VoIP services, and equally important, that the quality is as good as—or surpasses—that of current 2G/3G voice services?

VoLTE Benefits for CSPs

As one speaker reminded conference attendees, voice remains a core revenue generator, representing 70 percent of carriers’ global revenues—about $600 billion. This represents a huge opportunity and incentive for CSPs if they can rise to the occasion of leveraging VoLTE as a part of a suite of communications services.

That’s where VoLTE comes in. From CSPs’ perspective, VoLTE will make it possible for voice services to be run on their networks much like any other application. This means that voice calls and data sessions can travel side-by-side over LTE, creating the possibility of innovative new services that combine the two.

Cost reduction is one of the biggest draws for CSPs toward VoLTE services. When voice services are run through LTE/IMS, it was presented in the conference that twice as many voice calls can stream through the same spectrum. More calls mean more opportunities for CSPs to grow their revenues.

What’s more, policy and service opportunities can grow, scalability and performance can improve, and CSPs can experiment by separating data and voice into different packages.

Building a Business Case for VoLTE

Conference attendees were vocal on the business case for VoLTE and whether the costs associated with developing new voice services could be recouped by providing new capabilities.

VoLTE shows strong potential for CSPs. Voice is still a dominating revenue generator, thus VoLTE represents a viable opportunity. In addition to the efficiency gains that channeling voice and data traffic over a common network promises, the case for VoLTE may lean on how successful these tools are in helping CSPs.

Divisions on PCRF

Conference attendees agreed that PCRF will play an integral part in the VoLTE architecture. One speaker even called VoLTE a “game changer” for PCRF. It’s evident that telcos are actively looking to re-evaluate their policy management solutions against VoLTE’s new set of requirements.

But while speakers agreed that PCRF would need to be a focus, many were divided on the best route for tackling these changes. Harmand of Telefonica vocalized that a unified strategy to PCRF would be ideal, but a separate PCRF for VoLTE may make more sense for financial purposes.

Another countered that technically, it makes the most economical sense to utilise one PCRF across the entire network, and while another agreed on this technical point-of-view, s/he voiced concerns that the current implementations on PCRF installations might be a significant challenge to merge.

VoLTE is Here to Stay

The final verdict on VoLTE is this: it allows for superior voice calls, possible revenue growth and cost savings, thus providing a motivator for CSPs and users to adopt the service. While it’s not clear how long the path toward integration and bottom-line improvements will take, it’s very obvious that VoLTE is here to stay, and we’ll see a lot of new deployments in the coming months.

Zain Technology Conference Focuses on Customer Experience and the Future of Telco

Times are changing for the telecommunications industry. Different consumer habits, new mobile devices and increased competition from OTT players have all made companies rethink their revenue models. Services that used to play a big role in operators’ bottom line, like voice and SMS, have fallen to the wayside. Now, there’s a definite need to make up for those losses and more telcos are investing in technologies like predictive analytics.

At the recent Zain Technology Conference in Dubai, more than 600 participants gathered to discuss these trends and more. Hosted by Zain Group, which offers telco services in eight markets across the Middle East and Africa, the event was a massive success.

Panelists, thought leaders and executives got together to share insights and tips. More than anything, though, they discussed topics that were close to the theme of the event: “Innovating Zain’s customer experience.”

Comptel has always believed that telco needs to improve the customer experience to move forward, and this conference showed that we are far from alone with this line of thinking.

The Events List

Keynote presentations were delivered by Zain Group CEO Scott Gegenheimer and CTO Hisham Allam. Other presentations featured senior leaders from companies like Ericsson and Huawei. There were also more than 80 interactive sessions that discussed the future of the telco sector.

The theme of customer experience resonated throughout the sessions, speeches and impromptu meetings. Comptel’s session, “Engaging with Customers Through Data and Technology,” touched on these points as well. Vice President of Comptel’s Analytics Business Program, Jimmy Ruokolainen, explained how data and analytics can help create contextual, automated customer experiences that predict value segments, improve customer satisfaction and remove silos by unifying business and technology. Zain Kuwait has covered this topic before, as the company has been leveraging some of Comptel’s Social Links to improve customer experience through analytics.

The levels of competition today in the telco sector have made it imperative for every business to think about different ways that services can be distributed, marketed and, ultimately, delivered. This event, the third Zain Technology Conference, was bigger than either of the two before it. That shows promise for the future. It’s easy to tell that most communications service providers (CSPs) today are willing to broaden their horizons and experiment with new things to offer a better customer experience.

CEO Scott Gegenheimer summed it up well, saying:

“This has been our largest conference to date, and we are thrilled to see how much it has grown and how beneficial it is to our colleagues in the technology sector as well as to ourselves. With 63 technology providers taking the opportunity to present their latest technologies and solutions, I am confident that many valuable conversations were held over the three days, and that Zain Group’s view of its future is better understood by our suppliers and partners.”

Comptel’s Take

Comptel couldn’t agree more about emphasizing the intersection of technology and customer experience. Happy, loyal customers are going to be the most important business advantage for CSPs in the coming years, which is why Comptel invests so much into contextual intelligence for communications. Through innovative new ways in fulfillment, marketing and analytics, businesses will be able to meet customer needs in a way that personalises each interaction. In turn, customers will have positive impressions of the brand and will be far less likely to churn.

Going into 2014, it’s clear that customer experience is only going to increase in importance. But, judging from the attendance at Zain Technology Conference, CSPs will be more than prepared.

Voice is a Concern, Data Brings Promise to CSPs

Voice has turned into a voice of concern for CPS, since the voice & text messaging businesses don’t grow anymore: On the contrary, the revenues are declining.  The telecom industry is undergoing a thorough transformation, and as a result, Data is becoming more important day by day. The word on the street (or in space) is that he’s getting BIG.

Those who are most willing to accept the shifting landscape and try to figure out completely new business and revenue models are most likely to come out strong. Our guy Data really likes to crunch numbers and analyze information to arrive at the right conclusion. In a similar fashion, CSPs need automated predictive analytics to enrich information about the customer to provide attractive and accurate offers quickly, allow personalization, predict/prevent churn and identify fraud, create enhanced customer profiling and superior quality of experience.

It’s no longer news to anyone that customers pay a lot of attention to the price of their plans and quality of service when choosing the CSP, but it’s really important to realize how much the social circle influences a customer’s purchasing decision. A Vanson Bourne study indicated that globally more than 40% choose their CSP based on the experiences and influence from their friends and family. Understanding this playing field and social network sure sounds like a good idea, doesn’t it?

The processing, enriching and analyzing of big data to make it valuable and actionable requires a considerable amount of automisation, otherwise tackling such an immense amount of information becomes a daunting proposition.  An example of such automisation is the realtime decision-making process that defines, when and how to react to poor quality of service by identifying customers who are the most affected by it, to be able to launch a proactive retention or marketing campaign.

However, Data had to learn something else in addition to ‘mathematics’. If you want to connect with people on an emotional level, pure ‘mathematics, statistics and analytics’ aren’t simply going to cut it. You need creative ways to win the hearts and minds of people, and to do that, you have to understand them as individuals. Knowing your customers enables CSP to act proactively with the best possible personalized offering and contextually at the right time. An example of such offering is the proactive identification of those customers who need an upgrade for the data package because their usage pattern has changed. Or the proactive identification of those customers who are using multiple SIM cards from different CSPs. To prevent them from churning and making them to prioritize your offering, it’s relevant to know what their personal preferences are.

In addition to the ‘usual suspects‘ in the telecom ecosystem like customers, CSPs, vendors, OTTs (Internet Service Providers), additionally there are the newcomers from the ‘Internet of Things’ (such as energy, retailers, health, education, automobile, …) who can together with telecoms build unique value propositions where both parties can win. The struggle against the OTTs is transforming into a co-operative approach which allows value-adding joint propositions letting CSPs tap into the OTT’s revenue.

Some have suggested a premium charging model for LTE but many operators are distancing from this approach as it makes LTE generally unaffordable and unattractive for many customers, causing many to stay with their current 3G/HSPA+ plans. The essence of the discussion is to find other ways and means to generate revenue which places the emphasis on developing the co-operation between OTTs and CSPs. Identifying new revenue sources is essential, but we should not forget to keep an eye on the cost base. What’s interesting is that there seems to be a direct relation between subsidized LTE handsets and the CSP’s EBITDA margin: the subsidized handsets have a negative impact on the CSP’s margin which makes it important to know who’s really going to use the CSP’s LTE services (Source: www.tefficient.com ). The solution is to pinpoint those LTE users who really consume LTE services with the help of predictive analytics, instead of choosing the expensive strategy to subsidize LTE handsets for everyone. Please refer to the white paper written by Tefficient: ‘Why mass marketing is inefficient when launching LTE’,

On top of these above mentioned, there’s quite a lot of dynamics around identifying Quad Play opportunities in the CSPs’ business plans at the moment. Bundling broadband, TV, mobile, and fixed creates sticky services and customers, improves the revenue flow and reduces churn significantly, compared to the single or triple play. CSPs are seeking ways to provide these types of offering models by acquiring them or through co-operation. Tackling this kind of complex, multi-service and multi-technology order process requires a common platform with a fully integrated, catalog-driven approach to service order orchestration if you would like to fight the costly order fallouts. And when you add a robust Fulfillment environment enriched with analytics-driven smart order validation that closely monitors the end-to-end process of service-order capture to service delivery, you’re really good to go.

At the same time, shared accounts or multi-device/multi-user accounts are gaining more importance as an offering model, attracting not only users with several gadgets but also families and small business users utilising the same shared account for their data usage. These models are offered with no limit for voice & text usage but with limits on the data plans.  The new era clearly concentrates monetisation on data services. Some CSPs are even bold enough to talk about replicating the same model to their WiFi users, meaning that data usage limits would be imposed on home broadband users as well.

All in all, a lot of interesting topics circling around the market, and many CSPs have sent out ‘trial balloons’ to test the market response.  The known common denominator is that Data will be the future monetisation engine for CSPs, and BIG Data is the way to gain relevant information on customer’s preferences, personalisation and predictions for their ‘next move’. A horizontal and high-performant mediation layer contributes to the collection and processing of BIG data; and enriching the customer and network data with predictive analytics, human expertise and machine learning to automate decision-making. This is a viable way to go forward when combatting churn, generating new revenue and offering bespoke data service packages to customers.

Around the World

Pipeline…
Where Does IMS Stand?
Tim Young asserts that IMS is making a comeback in large part due to the growth of LTE. While LTE is all IP, there is virtually no support for voice, and as such, IMS has become a real contender to fill this gap, specifically as it applies to Voice over LTE (VoLTE).

This trend toward increased usage is supported by a recent Infonetics Research survey, which found that 78% of respondents will have mobile-specific services deployed over IMS by 2013, a significant increase from 35% today. The analyst firm also identified the desire to offer converged services and deploy LTE as key IMS growth drivers.

When IMS first entered the industry, some critics noted slow carrier interest and grew skeptical of its longevity. Now years later, do you think this renewed carrier interest foreshadows a promising future for IMS?

Billing & OSS World…
Gov’t Plan, Smartphone Adoption to Drive Data Growth in Colombia
A Pyramid Research report predicts that the Colombian government’s plan to increase broadband access and the adoption of smartphones will fuel data growth throughout the next several years. The government wants to quadruple the number of Internet connections in the country to 8.8 million, and is putting special emphasis on the availability of infrastructure for broadband coverage. This plan, along with handset vendor competition, more spectrum availability and decreasing smartphone prices, is expected to maintain Colombian telecom market growth.

This view reinforces predictions that Latin America will see broadband penetration skyrocket over the next five years and the amount of subscribers increase to 150 million-plus. Managing these new customers and services will be critical, and OSS/BSS will certainly play a significant role, allowing the region’s communications service providers (CSPs) to focus on their core business.

allAfrica.com…
Nigeria: GSM at Ten in Nation
August marks the tenth year since GSM was introduced in Nigeria. GSM made telephone access available to everyone, eliminating the age-long dominance of the wealthy on telephone use. But, the most prominent result of GSM can be seen in the tremendous growth of subscribers, rising from 450,000 fixed lines in 1999 to 90 million active lines, fixed and mobile, today. This figure is expected to rise even higher to 118 million mobile subscribers by 2014.

As IDC analyst Andy Hicks notes, developed market telcos can learn from the achievements of CSPs in emerging markets such as Nigeria. These include aspects like offering compelling services and real-time solutions, as well as identity management. What are some telecom trends you’ve seen in emerging markets that others can draw inspiration from?

LTE: Breathing New Life into IMS?

IMS (IP Multimedia Subsystem) is back in the news! Remember IMS? There was a lot of hype around it a few years back, then came a big reality check (e.g. how can the cost of deployment be justified?), and in the end just a few operators decided to roll out IMS in earnest (and indeed Comptel was part of some of those successful deployments).

So, why is it in the news again?

The main reason why IMS is currently making headlines is LTE (Long Term Evolution): the new mobile technology that effectively brings in IMS. This has led some observers to declare that IMS is nowhere at the moment but will be everywhere once LTE comes in. Now I don’t see it that way—far from a big bang, the introduction of IMS is and will remain to be a slow and incremental process. I would like to explain why.

Firstly and most importantly, I believe that the foundations for IMS are already being laid now at many mobile operators, because of factors that are not directly related to LTE. The massive increase in mobile broadband and the development of packet core networks is moving the industry slowly but inevitably towards an IMS type of all-IP environment. To an OSS/BSS vendor like Comptel, this can be witnessed relatively easily by the amount of work done around DIAMETER and various DIAMETER protocol implementations. We see that, for example, in various policy control approaches taken by most mobile operators, such as AT&T (which I blogged about recently) or the Comptel Roaming Cost Control implementation at DNA Finland. DIAMETER is not necessarily the de-facto standard yet, but it seems that more and more equipment supports DIAMETER as the ‘standard’ protocol for usage charging or policy management. And this is key to IMS succeeding; DIAMETER is part of the IMS architecture.

Another factor driving the progressive evolution to IMS is the growing interest in using user data for active decision-making in OSS/BSS. I have already mentioned policy control, but we are also seeing an increased need for customer-centric fulfilment and charging. And, this is mirrored by the evolving role of customer information repositories, such as GUP (Generic User Profile), SPR (Subscriber Profile Repository), HSS (Home Subscriber Server) and HLR (Home Location Register) and others, as well as the significantly increased awareness and adoption of 3GPP-aligned strategies. So while data management is still a major challenge and synching all repositories is still a major headache, there is no doubt that customer data and intelligence are moving towards the network—as IMS requires it.

That said, while there is clear evidence that the foundations are already being laid pre-LTE, I also believe that when operators do eventually deploy LTE, they will not go to an all-IMS architecture straight away. The main reason for this is that operators are unlikely to do a wholesale replacement of their established 2.5 and 3G networks. The fact is that, despite the growth in data, revenue is still mostly made with voice, and voice does not really need an all-IP environment. The Circuit Switched (CS) core is still there, and why not use it? Just like PSTN, the CS core will be more or less a place where no new investments are made, and if they are made, it’s because the new stuff is substantially lower-cost, if nothing else. Furthermore, while IP core is struggling to cope with the smartphone load of IP traffic, I would think that operators would be adopting the wrong strategy if they put their money making voice onto an overloaded (or soon-to-be overloaded) IP network. There may be a time when it will make economic sense to move to an all-IP network, but operators will also be keeping a CS network. And that also means that IMS will have to sit alongside more traditional and indeed legacy systems.

There is one final factor that I would like to highlight: China. While the rest of the world is contemplating a move to IMS, China Mobile and more recently China Telecom are boldly going where virtually no other has before—a large scale, nationwide IMS infrastructure. In my opinion, aside from the example it sets, this will mean that some vendors who supply the network-side kits to this investment will be in a fairly strong position in the future, having gained invaluable experience, and that will serve to reassure other telcos about IMS. This move will impact the telco sector much more than we can even imagine today.

In short, I believe we are unlikely to see a mad rush to IMS, just a slow and steady adoption as we have seen up to now.

In reality, neither IMS nor LTE (or any other technology) matters really. What matters is that we, the users, get the services we want at a price we’re willing to pay for with devices and technology supporting it. If IMS or LTE are the technologies that can deliver the necessary capacity, experience, latency or whatever functionalities (or not) needed, while balancing operators’ costs so that they can continue to build more, then they will be adopted. If not, they will fail and be hyped about for awhile and forgotten.