Worldwide Adoption of Vo4G Gaining Momentum

PRESS RELEASE

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October 2008: Press Release

Worldwide Adoption of Vo4G Gaining Momentum

Still Faces Challenges Ahead

MONTREAL, Canada, January 21, 2009 –The deployment of VoIP over 4G will be crucial for the success of service providers, and will greatly impact the overall size of the LTE and WiMAX markets, according to Maravedis’ first dedicated report on wireless VoIP market trends, “VoIP over 4G (Vo4G): Opportunities, Challenges and Deployment Trends” (www.maravedis-bwa.com).

“In the mainstream cellular industry, VoIP has yet to make any real inroads, due to the walled-garden approach of cellular carriers and technical considerations of today’s 3G networks. LTE, much like WiMAX, is being optimized for VoIP performance. When LTE networks are deployed, the bulk of revenue will still be voice revenue, making it paramount that the customer experience on a VoIP 4G network will be equivalent to their 3G experience. A shift from dual-mode networks with 3G voice and 4G data will occur over time to capitalize on the added efficiency of fully-packetized networks,” says Adlane Fellah, CEO of Maravedis.

“The VoIP vendor community sees a great opportunity in Vo4G. However, vendor selection is key,” says Basharat Ashai, co-author of the report. “Since WiMAX does not today specifically address how Quality of Service (QoS) is applied for voice traffic, equipment vendors decide how to classify packets as VoIP and how to apply QoS to those packets,” he added. “Best practices” for network architecture and provisioning are lacking. Vendors need to focus on developing vertical applications and OSS/BSS capabilities targeted towards the WiMAX market.

“WiMAX and LTE promise to be the first wireless access standards fully capable of supporting VoIP, by incorporating low delay along with sufficient QoS capabilities and bandwidth,” added Mr. Fellah. The key parameters are available in these new technologies; however delivering a voice access system on an end-to-end basis remains a technically challenging task.

WiMAX will predominantly continue to be used to deliver high speed Internet for another year or two, but the successful deployment of VoWiMAX is crucial to profitability. Barring a few exceptions, voice revenue does not yet make up a large component of total revenue.

KEY FINDINGS

The delivery of VoIP services on a wireless channel can strain the capabilities of the wireless infrastructure and user equipment by tying up additional processing power than would be needed for non-voice applications.
Next generation wireless technologies—WiMAX in particular—have done little to ensure that VoIP over wireless solutions from vendors are adequate and consistent. There are no real guidelines for packet classification or the application of a Grade of Service to VoIP packets, meaning that carriers can find themselves on their own as they try to build their VoIP wireless network.
The current number of worldwide Vo4G subscribers is less than 300,000 (mostly VoWiMAX)– an estimated 20% of the cumulative total of WiMAX subscribers.
Europe leads the number of Vo4G subscribers with a share of 35%, followed by Asia Pac with 25%.
For fixed VoWiMAX to really see an increase in ARPU, it needs to be positioned as a wireline replacement technology, and should be marketed as a prime solution for CPE-based residential phone service.
There are significantly fewer options in LTE for vendors to differentiate than there are for WiMAX, which will likely provide carriers with a well-defined roadmap for deployment. In order to better facilitate mobile voice, LTE has been defined with a much shorter frame size to reduce delay—1ms vs. 5ms in 802.16e-2005—and an uplink modulation that maximizes range and battery life.
3G+ operators’ attitude towards VoIP is split between those who are afraid of losing revenues and those who embrace the open platform. The majority has yet to determine what strategies they will adopt vis-à-vis VoIP services.

Another driving factor will be the availability of VoIP capable multimode (WiMAX, 3G, LTE) mobile Internet devices (MIDs), which should greatly increase the consumer value proposition, and in turn drive increased subscription and average revenue per user (ARPU). Vo4G can make a dramatic impact on service providers’ top line revenues.

Download Executive Summary

VoIP over 4G (Vo4G): Opportunities, Challenges and Deployment Trends” a new study from Maravedis Research, examines the main trends in this market and offers an in-depth discussion of the ecosystem and value chain. It includes detailed descriptions of the main players, drivers and barriers. The report is available at http://www.maravedis-bwa.com/how-to-order.asp

MARAVEDIS is a leading analyst firm focusing on disruptive technologies including smart distributed networks using WiMAX, and 3GPP/LTE. Maravedis works with all stakeholders in the broadband wireless industry.

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For More Information:
Adlane Fellah, Tel: +1 (305) 992-3196
afellah@maravedis-bwa.com