There are people still alive today who knew the operator who placed the very first transcontinental phone call...
in the U.S.
Just as packet-based data services have replaced circuit-switched data, packet voice is expected to replace TDM voice.
There are people who had party lines, who remember four-digit phone numbers and who used operator assistance for interexchange calling. At the other end of the spectrum, there are also people who have used cell phones atop the highest mountains and made calls from places where explorers launched polar expeditions 100 years ago.
Communications and telephony have made great strides in a single lifetime, and it's not over yet. But with trillions of dollars of assets tied up in the public switched telephone network (PSTN), questions about next-generation voice services are financially critical. It's less a question of whether things will change (they already have) than of how those changes can be accommodated.
PSTN consists of voice services based on time-division multiplexing (TDM). Just as packet-based data services have largely replaced circuit-switched data, packet voice is expected to replace TDM voice.
The primary drivers behind the shift to packet voice include:
- The high cost of PSTN switching;
- Increased competition from over-the-top (OTT) competitors using packet voice;
- The evolution of mobile services to 4G (which, unlike 3G, lacks a circuit-switched voice channel);
- Fixed-mobile convergence (FMC) and femtocell deployment; and
- Enterprise pressure to adopt IP voice delivery (such as SIP trunking).
Taken together, the timing and magnitude of these drivers will determine the likely makeup of next-generation voice services.
Going over the top to develop a packet voice model
The OTT voice driver is the most dramatic and, in many ways, the most relentless. Broadband wireline and wireless deployment create a "new dial tone" in the form of Internet access.
OTT providers like Vonage and Skype can ride on Internet connectivity and take advantage of its low marginal cost by setting low voice prices that undercut traditional voice pricing and make it difficult for operators to provide PSTN voice at a profit. Over time, this trend alone would drive operators -- particularly those who don't offer any mobile services -- to a packet voice model.
4G mobile growth affects next-generation voice services
In a way, 4G deployment is a "triple threat" driver:
- 4G standards don't include TDM voice channels, forcing operators to either adopt Voice over IP (VoIP) or to rely on a circuit-over-packet voice option like Voice over LTE via Generic Access (VoLGA), which requires incremental equipment and cost.
- 4G is driven by smartphone deployment. Smartphones are likely to support OTT voice services that compete with whichever basic wireless voice option is selected by the operator.
- Finally, most operators are looking at home deployment of femtocells to enhance 4G coverage. This deployment encourages FMC by enabling wireline calls to ring down on wireless handsets in the home.
VoIP evolution, packet voice rise lead to two next-generation voice service models
It's clear from the points above that, regardless of the drivers and timing, VoIP evolution and a shift to packet voice is inevitable. Given that, there are two possible basic service models for the deployment:
Operators could adopt an IP Multimedia Subsystem (IMS) voice framework, or they could adopt what is essentially their own OTT model of packet voice service, whether it's built on peer-to-peer (P2P) technology like Skype or on a more traditional model.
The issues here are likely to be roaming and settlement of charges. IMS includes controls over roaming and mechanisms for settlement of roaming charges among carriers. If future wireless services necessarily include "data roaming" capability, then an OTT voice model would ride on the data authentication and settlement processes, and the decision on IMS would be made based on whether all-data roaming would be managed through IMS. If we assume that data roaming will not be universally supported or that voice OTT services won't be universally allowed on handsets, then IMS is likely to deploy to support the roaming and charging processes.
Smartphone use increases social networking, downplays voice …
One factor already influencing voice planners is the way smartphones are used. Early statistics show that users are online to access social networks more often than they're on voice calls, even today, and that trend is likely to accelerate.
Its rate of acceleration would be increased by adoption of tablet devices or other appliances that are data-connected to mobile wireless services and don't offer voice communications. These devices are also the most likely to utilize OTT voice services like Skype, and they encourage laptop users with mobile dongles to use OTT voice services by "socializing" the notion of OTT voice to a wider market.
The counter-trend here is the deployment of femtocells and the likely impact that has on FMC and packet voice evolution. If consumers use their mobile handsets as wireline phones at home, it perpetuates a handset view of calling and maintains the current service provider as the voice provider of choice. Further, femtocell-driven FMC is much more likely to benefit from (and thus validate) IMS deployment, which would tilt operators away from emulating OTT mechanisms for 4G voice services.
… But voice as an application remains a major opportunity for carriers
Voice services are not a major bandwidth consumer, and thus are not demanding at a transport level. But voice is an application that most consider absolutely critical, because voice calls are what people instinctively rely on for emergency aid. If service providers deploy femtocells and draw on the FMC opportunity to validate their "managed" notion of VoIP before OTT alternatives gain significant traction, it's likely that they will sustain their position in voice for a long time to come, and that IMS and other session-management voice technologies will become the dominant form of consumer and business voice services.
About the author: Tom Nolle is president of CIMI Corp., a strategic consulting firm specializing in telecommunications and data communications since 1982. He is the publisher of Netwatcher, a journal addressing advanced telecommunications strategy issues. Check out his SearchTelecom.com networking blog, Uncommon Wisdom.