Problem solve Get help with specific problems with your technologies, process and projects.

Next-gen voice services create carrier opportunities

As revenue generated by traditional voice services continues to decline, telecom service providers must look to next-generation voice services that include unified communications (UC), fixed mobile convergence (FMC) and video calling to create new revenue sources for the future.

Editor's note: Telecom service providers must work harder to create new avenues for voice services revenue as customers increasingly move toward wireless and the demand for traditional voice services -- the original killer app and still the mainstay of telecom -- continues to decline. CIMI Corp. president Tom Nolle examines how service providers can use quality of service (QoS) as a differentiator when looking at next-generation voice services, including unified communications (UC), fixed mobile convergence (FMC), high-fidelity voice, and even video calling -- finally.

Most service providers already realize that the revenue stream from traditional voice services has peaked and may be falling under competitive and technology pressure.

Enhanced voice services have been possible for years, but they're becoming essential because OTT competitors are looking at them for the first time.
Tom Nolle
presidentCIMI Corp.

As voice has traditionally been the core telecommunications service, this creates a significant challenge for service providers to build new revenue sources. But for some years, it will be difficult for service providers to grow profits without having voice contribute its traditional share of the revenue. All of this is motivating service providers to look beyond the old voice service models to find several new sources of revenue.

Next-generation voice services offer service providers basic but compelling possibilities for future growth and increased revenue, but they must first achieve a few objectives that allow these services to reach their peak potential. First, next-gen telecom voice services need to be differentiated from over-the-top (OTT) voice competition. Second, they have to add some value to voice services that can not only sustain margins but build additional profits. Service providers are most likely to meet these goals through a combination of network-wide enhancements and enhancements that target consumer and enterprise needs in a more specific way.

QoS capabilities offer carriers two voice service differentiators

Most network operators would agree that the QoS they can guarantee is a logical differentiator for their voice services. Over-the-top (OTT) voice is necessarily a best-effort service, and traditional worldwide voice communications has a history of dependability and stability. Today, with 60% or more of voice users in industrial economies already using broadband Internet service, it would be easy to opt for an OTT voice strategy. Yet only a very small percentage of users do that. Far more voice lines are lost to mobile service than to OTT voice. Voice requires so little bandwidth, however, that best-effort is good enough more often than not, and finding other ways of making QoS valuable is important if the QoS differentiator is to remain valid. High-fidelity (Hi-Fi) voice and video calling are the two approaches most often considered by providers.

    • Hi-Fi voice is simply voice service without the frequency filters common in PSTN wireline and wireless voice. Most voice services today deliver sound from about 100 Hz to about 4 KHz, which is a fraction of the range people can hear. High-fidelity voice is aimed at delivering approximately the full human range -- between about 20 Hz and 18 KHz, and it requires about four times the bandwidth. The whole purpose of Hi-Fi voice is to more closely duplicate in-person conversation, so it's logical to assume that users would be less tolerant of best-effort delivery.

  • Video calling has been a dream of service providers for decades, but existing issues have prevented it from becoming a reality. Research suggests that video calling is more likely to be accepted if all calls start in voice-only mode and must be explicitly switched to video by each party independently. Even then, while interest in video calling ranks high in surveys, consumers with video cameras and the capability to do video chats online tend not to use the capability regularly. Vendors like Cisco are working to change that and to create a video chat model built around TVs rather than PCs. Operators could find this an easier model to deploy as an incremental service with its own price and thus be more likely to create an incentive to promote a video calling model.

Unified communications, collaboration and FMC offer voice path

Given that people are accustomed to "low-fi" voice-only calls, getting them socialized to alternatives may be difficult.

Next-gen voice services resources
Telecom business model transformation requires symbiotic service models

Mobility in fixed mobile convergence

Telepresence, unified communications and collaboration: A network operator's role

Hosted UC still going strong for service providers despite recession

Fortunately, two other exploitable voice trends exist that can help promote voice QoS while providing their own support for improving voice profits: unified communications (UC) and fixed mobile convergence (FMC).

UC is an "application-based" view of communications services, normally built around a graphical user interface (GUI) "panel" that represents the user's voice, email, and IM tools and provides a central notion of the user's status or "presence." For business users, the UC application normally runs on a desktop or laptop computer, and most of the UC market impetus to date has been created by software and phone system vendors. For consumers, UC is most likely to be sold as an appliance that provides a multi-service display, something that may evolve out of in-home multi-function wireless "hub" products, such as the Verizon Hub already sold by Verizon.

UC services can be a direct revenue source to operators because they can integrate a variety of communications services into a single offering in a functional way, and not just by creating a kind of billing package. UC is also important because it creates a different way of calling that can lead consumers to a higher expectation of quality. Because UC is often combined with collaboration where video and high-fidelity sound are more easily justified, it represents a way of building demand for those capabilities without requiring users to change their "everyday" calling practices.

FMC is, in many ways, a logical step from UC -- one that changes voice technology to make unified services more effective. What's driving FMC today is a combination of femtocells and 4G/LTE deployment. Femtocells are simply small "private" cells associated with a home, office or hospitality location that are fed through a local wireline broadband connection. Users inside the femtocell aren't using the providers' main cells, so some operators might market it as a way to reduce or eliminate air time charges for wireless connections. But femtocell user policies are not yet decided. A lower "on-femtocell" charge would make it easier to induce users to try things like video. If wireline and wireless voice are both transformed to VoIP (as they would be eventually through LTE deployment), Hi-Fi is also easily introduced. In a sense, FMC approaches unified communications from the infrastructure side, where UC services approach it from the customer side.

The bottom line on enhanced voice services

Enhanced voice services have been possible for years, but they're becoming essential not only because carriers want to sustain voice margins but because OTT competitors are looking at them for the first time and encroaching on what has traditionally been a carrier's market. Google Voice is a direct threat to network operators' voice business, a signal that if operators don't enhance their voice services, others will fill the gap. Competition has often been more effective than opportunity in driving telecom market changes. If that's the case, we may be looking at a major transformation in voice services over the next few years.

About the author: Tom Nolle is president of CIMI Corporation, a strategic consulting firm specializing in telecommunications and data communications since 1982. He is a member of the IEEE, ACM, TMF and IPsphere Forum, and the publisher of Netwatcher, a journal in advanced telecommunications strategy issues. Check out his networking blog Uncommon Wisdom.

This was last published in July 2009

Dig Deeper on Telecommunication networking

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.