VoIP and LTE: a question of quality

LTE_VoIP_VoLTE_OpenCloud

A few weeks ago, we ran an article from Mark Windle of OpenCloud, titled VoLTE versus VoIP, that looked at the advantages that operators and OTT each have in providing voice services over LTE. Amongst the operator advantages listed by Mark were service ubiquity and quality of service. As the ability of operators to “monetise” QoS is such a hot topic at the moment, we asked Mark to come back and write a second piece looking at how they might do this. 

Many are sceptical that operators will be able to apply QoS-based services without incurring either customer or regulatory displeasure. Not only that, but there’s the small matter of putting in place the interfaces, systems, and business relationships, to enable such an approach. 

So should operators be trying to make Quality a key differentiator for voice services, and if so, how? Once again, thanks for Mark for a really clear article that should spark some further thoughts amongst our readers. 

Quality Matters as Operators Find Their Voice

by Mark Windle, Head of Marketing, OpenCloud.

VoIP was initially confined to use from fixed locations over fixed-line broadband. Today, consumers are increasingly using free VoIP apps on their mobile devices from static Wi-Fi hotspots. These apps can also connect over 3G which can be sufficient to enable mobile VoIP with an adequate quality, so long as the user doesn’t fall out of coverage or cross cell-boundaries. Faster mobile broadband, as delivered by LTE, enables these services to attract more mobile use through better data connections and with options such as HD voice and video. Network operators are at risk of being regarded as second-choice providers of real-time communications: or worse, they may be completely overlooked. 
With alternative access available via Wi-Fi and with access via mobile broadband somewhat protected by consumer pressure and concerns over net-neutrality, it seems likely that any attempt to eliminate these third-party VoIP services will fail. However, there are opportunities for network operators to defend their market and revenues.

The Voice of the Consumer

If you can’t beat them, join them. So the saying goes, and more and more operators are now launching their own branded VoIP services and applications. These are also delivered over-the-top  of any available data connection, be it fixed-line, Wi-Fi, the operator’s own mobile broadband, or that of a competitor. Generally, operators own VoIP apps are available for anyone to use whether they’re a subscriber or not.  So, if consumers want “free” voice calls, they can now make them using services provided by their network operator, which neutralises the ”free” advantage of the 3rd party service provider. 
Operators can level the playing field by launching their own VoIP services, but they run the risk of potentially cannibalising the very revenue stream they need to protect.  In order to tilt the table to their advantage network operators can harness two key differentiators.

The Voice of Experience

The first differentiator is something so seamlessly woven into the user experience that we are unaware of it until it disappears – dependability. VoIP calls can be unreliable.  Many of us will have experienced the frustration of a VoIP connection dropping repeatedly, with disastrous impact on the flow of the conversation.
Equally, anyone suffering problematic VoIP calls will recognise that the solution is often to reach for our mobiles (or landlines): and the trade-off between the cost and the user experience is easily and quickly rationalised.
Problems with VoIP can even occur on fixed broadband. In an attempt to avoid such issues while on a mobile broadband connection, those services are typically used from fixed locations: getting a free call at the expense of being less mobile. Taking it a stage further and attempting to use over-the-top VoIP while on the move just doesn’t seem worth the pain. There’s value in “mobility”.  There’s value in “dependability”. The combination of the two is extremely potent: and it’s something network operators do well.
The second differentiator arises from the network operators’ data “pipe” that is essential for third party over-the-top VoIP. The so-called “Quality of Service” (QoS) – the way data flows up and down through this pipe – is under the control of the network operator and can be regulated to better suit the experience of the end-user. 
QoS is actually a collection of service qualities based on metrics such as how much delay the data experiences , how much that delay varies, how much bandwidth is guaranteed (if any), how much can be used for sudden bursts and so on. QoS settings may be established that enable good browsing but render over-the-top VoIP services useless. However, subscribers want access to VoIP services,  to block them entirely would be detrimental and would stimulate churn. It would be more far better to enable VoIP use, and to extract some value from it.
Network operators have now identified that the exposure of relevant APIs is a good opportunity for monetising QoS, and a variety of business models have already been conceived that can be extended to exploit QoS APIs.

Paying the Piper

In September this year it was reported that Microsoft was to enable direct carrier billing for Skype: Skype credits paid for through the customers’ mobile phone account. Money flows from the consumer through the operator and on to the OTT VoIP provider.
With QoS APIs, the mobile network operators can offer users of third party VoIP services the opportunity to buy ‘quality mobile VoIP time’. For example, this could include reserving bandwidth to protect a certain voice quality, or enabling sufficient bandwidth for HD voice or video while mobile. Skype users could then, for example, pay for this via their Skype credits: and the money flows back to the network operator.
Alternatively, enhanced QoS could be advertising funded – a business model that has been around for a while and one that service providers are familiar with. However, inserted adverts can disrupt voice-only calls interrupting the user experience. For video calls, adverts can be played in without always interrupting the call. Losing video for a few seconds can be tolerable if the voice service continues; there’s even less impact if the video real-estate is shared in some way.
Of course, enhanced QoS isn’t just for voice and video calls – this same API has other uses. For example, video streaming sites may allow you to buy “faster downloads when mobile”. Again, this could also be ad-funded.  Players of on-line, interactive games may be offered similar options.
The interesting thing to note here is that the APIs push the QoS choice into the context of the service (the game, the video streaming or the VoIP service) that uses it. Consumers will evaluate the additional expense by how it improves their experience. That makes it far easier to sell than the network operator offering 100MB/s, or 200ms latency, for example .
In addition to the ‘subscriber-pays’ and ‘ad-funded’ models, QoS APIs will also be used, and funded directly by enterprises. For example, luxury car manufacturers are likely to want potential customers to have the best experience when using their website. To support customers browsing on their mobiles, the manufacturer may choose to pay so that the video of their latest model streams quickly to the device.
In general, the roll-out of LTE and availability of QoS APIs don’t really create genuinely new business models: it’s more a case of extending the scope of existing business models within telecoms. More substantial impact may be expected in how the network operators put the pieces together in the service bundles on offer.

Key Changes

The role of “data” in the various propositions on offer has been evolving: from an optional “bolt-on”, to now sitting alongside ‘minutes’ and ‘messages’ as an equal. With the base-line value of minutes (and messaging) eroded by the wash of free VoIP alternatives, data is set to become the core of the bundle. EE’s recent announcement of their LTE tariffs in the UK reflects this.
For some subscribers, that will be it – apparently.  Consuming the data allowance they’ve paid-for, those subscribers will use third party VoIP (and IM) services that appear to be free: tolerating a basic quality of service, but minimising their expenditure. If they want higher quality (perhaps for HD voice or video), and if their VoIP service supports it, they may be able to buy “quality mobile minutes” from that VoIP provider.
As noted already, the network operators will provide their own brand of “free” VoIP service. This would include options for subscribers to bolt-on enhanced quality of service as a package of ‘quality time’, either pay-as-you-go (PAYG) or through their regular monthly subscription.

Sound Delivery

Few subscribers will want to go without the dependability and mobility of telco-grade voice services delivered by the network operator.  Such services will be delivered as voice (and video) over LTE (VoLTE), and will share parts of the IMS core with the operators VoIP solution. However, unlike simple VoIP where calls may drop at cell boundaries or due to fluctuations in available bandwidth, call-continuity will be provided for VoLTE through seamless, mid-call fall-back to the legacy (2G/3G) network.
Subscribers could use their ‘quality time’ from the network operator for better VoIP minutes – HD voice or video, for example – when using the operators VoIP service.  Subscribers could also use their ‘quality time’ for dependable ‘traditional’ mobile use using VoLTE.
Additionally, subscribers could elect to spend their ‘quality time’ when the network operator detects that the subscriber is making a call via a third party VoIP service to get the best possible experience:  or for accessing high-volume content on-line locations, when accessing YouTube, purchasing audio, or uploading photos for example.
No doubt, operators would find their own variations.  However, delivering a simple set of choices that cater for all consumers is critical.  Telecoms network operators are losing market-share and revenue to ‘free’ third party OTT VoIP services, and it seems inevitable that those services will retain, and possibly grow, their market-share for some time to come.

Audience Engagement

There seem to be a number of reasons why network operators should launch their own VoIP services, but one reason is most compelling. By introducing their own free VoIP and basing their offers on ‘data allowance’ the network operators can neutralise the appeal of alternative VoIP services.
With the launch of LTE, the network operators can expose APIs that enable subscribers to enjoy ‘quality time’, whether they are talking, on a video-call, or streaming video or playing interactive games.  These APIs can be used equally by the network operator for its services, by third parties for their OTT VoIP services, and elsewhere for other online services. 
Creating a simple proposition that acknowledges and satisfies the “budget” end of the real-time telecoms market enables network operators to re-establish the value of higher quality services.  At that end of the market lie services that we are prepared to pay for, simply because they just work – wherever and  whenever.  When it comes to quality, the network operators can really make their voice heard above the chorus of VoIP alternatives.