Forecasting the Commercial Impact of Wireless VoIP in the USA and Western Europe

Transcription

1 Forecasting the Commercial Impact of Wireless VoIP in the USA and Western Europe Mark Heath and Alastair Brydon with Alex Zadvorny Edited by Gordon Davies

2 Analysys Research Fixed Networks and Services Analysys Research Fixed Networks and Services online market intelligence service World Telecoms Marketplace online market intelligence service Developing a Successful Carrier Ethernet Service Portfolio Fibre in the Last Mile: the business case for FTTP and VDSL The Impact of the Multi-service Play: scenarios for future growth Creating a Mass Consumer Market for Videotelephony: opportunities and challenges Telco TV: European market opportunities and operator strategies Western European Fixed Telecoms Markets: market sizings and forecasts Outsourcing by Telecoms Operators: strategic and commercial options Naked DSL: challenges and opportunities Defending Against Fixed Mobile Substitution: detailed operator case studies IPTV: a breakthrough for US telcos? Retail VoIP in Western Europe: forecasts Mobile Networks and Services Analysys Research Mobile Networks and Services online market intelligence service Evolution of Mobile Handsets to 2011 and Beyond: market analysis and forecasts Pricing Mobile Services for Success: towards a bundled future Scenarios for Enterprise Mobile Data Services Evaluating the Options for Mobile TV and Radio Broadcasting in Western Europe Lessons from the Japanese and South Korean Mobile Markets: handsets, services, content and pricing The Western European Mobile Market: trends and forecasts The Central and Eastern European Mobile Market: trends and forecasts Creating a Mass Consumer Market for Videotelephony: opportunities and challenges Prospects for the Evolution of 3G and 4G Scenarios for the Evolution of the Wireless Industry in Europe to 2010 and Beyond Outsourcing by Telecoms Operators: strategic and commercial options Consumer Demand for Fixed Mobile Convergence Solutions: a survey of end users Accelerating Fixed Mobile Substitution: detailed operator case studies The US Mobile Market: trends and forecasts Making a Success of Mobile TV and Video: 3G MBMS versus DVB-H, DMB and MediaFLO Billing and OSS Analysys Research Billing and OSS Markets online market intelligence service World Telecoms BSS and OSS Markets: trends and analysis Billing for Mobility: strategies for convergent charging Published by Analysys Research Limited St Giles Court 24 Castle Street Cambridge CB3 0AJ UK Tel: +44 (0) Fax: +44 (0) research@analysys.com Analysys Research Limited 2006 All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means electronic, mechanical, photocopying, recording or otherwise without the prior written permission of the publisher. ISBN

3 Contents 0 Summary viii 1 Players in the mobile industry must assess the impact of wireless VoIP in the context of overall strategy 1 2 Mobile network operators and end users will be critical players in determining the success of wireless VoIP Wireless VoIP brings potential opportunities and threats for many players in the telecoms industry Industry players should not assume that VoIP services will follow the same evolutionary path on fixed and mobile networks Equipment vendors, keen to sell infrastructure, handsets and services, are the main current proponents of wireless VoIP Mobile network operators are crucial to the future of wireless VoIP but must be persuaded to replace their circuit-switched voice infrastructure Wireless VoIP services will only succeed if they are an attractive alternative to existing voice services for end users Wireless industry players need to quantify the impact of wireless VoIP on the overall voice market in order to focus on the greatest revenue opportunities 15 3 Improvements to cellular radio technology will create the long-term business case for mass-market wireless VoIP services Early deployment of CDMA EV-DO Revision A in the USA will give cellular VoIP a head start over Western Europe Prior to the commercial deployment of 3G LTE, there will be no business case for W-CDMA operators to migrate from circuit-switched voice The lower cost of delivery, enhanced network capacity and increased service benefits of 3G LTE will create the business case for W-CDMA operators to embrace VoIP Migration to cellular VoIP will require investment in IP core network equipment such as softswitches in order to provide sufficient capacity and quality of service The production of cellular VoIP handsets will benefit from greater economies of scale than dual-mode, cellular/wlan handsets 22 Analysys Research Limited 2006 Contents

4 iv Forecasting the Commercial Impact of Wireless VoIP in the USA and Western Europe 3.6 Mobile operators can take action to control arbitrage opportunities in both the short and long term When cellular VoIP services mature, mobile operators must position them as premium voice services in order to maintain ARPU Cellular VoIP services will be adopted earlier in the USA than in Western Europe as CDMA2000 operators introduce EV-DO Rev A Cellular VoIP will begin to grow rapidly in Western Europe from 2011, following the introduction of 3G LTE By 2015 cellular VoIP will carry more traffic and generate more revenue than all fixed voice services in Western Europe There will be significant differences among countries and operators in the extent to which they embrace cellular VoIP services 34 4 The dominance of cellular VoIP services will constrain wireless VoIP on alternative networks to niche opportunities VoIP on alternative wireless technologies will struggle to compete with cellular voice services Residential VoWLAN services will be held back by the complexity of the service, the limitations of handsets and the lack of price differentiation from cellular services Public VoWLAN will be unable to compete with the ubiquity, simplicity and cost effectiveness of cellular services Enterprise VoWLAN will be an opportunity for business solution providers, but WLAN costs will constrain deployment The limited deployment of BWA networks will constrain the impact of BWA VoIP services in the USA and Western Europe 41 Actions 42 Market intelligence services from Analysys Research 46 Reports from Analysys Research 47 Custom Research: meeting your information needs 48 Analysys Consulting 49 List of Figures and Tables Figure 0.1: Annual voice minutes carried by fixed and wireless networks in the USA, xi Figure 0.2: Annual voice minutes carried by fixed and wireless networks in Western Europe, xi Table 2.1: Categories of cellular networks, WLAN and BWA technologies and Table 2.2: examples of wireless VoIP solutions that use these technologies 4 Potential opportunities and threats created by wireless VoIP services on cellular networks, WLAN and BWA technologies 5 Table 2.3: Evolution of capabilities from W-CDMA Release 99 7 Table 2.4: Evolution of capabilities from CDMA Revision 0 8 Figure 3.1: Average voice minutes per user per month in the USA for cellular services, Figure 3.2: Annual voice minutes carried by fixed and wireless services in the USA, Contents Analysys Research Limited 2006

5 Forecasting the Commercial Impact of Wireless VoIP in the USA and Western Europe v Figure 3.3: Average voice revenues per user per month in the USA for cellular services, Figure 3.4: Annual revenues generated by fixed and wireless voice services in the USA, Figure 3.5: Average cellular voice minutes per user per month in Western Europe, Figure 3.6: Annual voice minutes carried by fixed and wireless services in Western Europe, Figure 3.7: Average retail revenues per outgoing call minute generated by fixed and cellular voice services in Western Europe, Figure 3.8: Average voice revenue per user per month in Western Europe for cellular services, Figure 3.9: Annual revenues generated by fixed and wireless voice services in Western Europe, Figure 3.10: Penetration of fixed broadband and cellular mobile services in the USA and Western Europe, Figure 4.1: Annual voice minutes carried by VoIP services on BWA, cellular and WLAN networks in Western Europe and the USA, Figure 4.2: Annual revenues generated by VoIP services on cellular, WLAN and BWA networks in Western Europe and the USA, Authors Dr Mark Heath and Dr Alastair Brydon are founders of Sound Partners Ltd and authors of more than 20 reports from Analysys Research, including Pricing Mobile Services for Success: towards a bundled future, Evaluating the Options for Mobile TV and Radio Broadcasting in Western Europe, Lessons from the Japanese and South Korean Mobile Markets: handsets, services, content and pricing, Prospects for the Evolution of 3G and 4G, Scenarios for the Evolution of the Wireless Industry in Europe to 2010 and Beyond, Accelerating Fixed Mobile Substitution: detailed operator case studies, Delivering Strategic Benefits with IP Multimedia Subsystem (IMS), The Future of MVNOs in the 3G Era, and Wireless Voice over IP: technical and commercial prospects. Mark is Director of Research at Sound Partners Ltd. Mark has held a number of marketing and business development roles in Nokia, ultimately becoming responsible for strategy and business development across Europe. Previously, Mark was responsible for business planning at BT Cellnet in the UK, after spending six years at BT in wireless systems research and development. Mark holds BSc and PhD degrees from the University of Leeds, winning the University prize for his research in telecommunications. Mark also holds an MBA, graduating as top student from Henley Management College. Alastair is CEO of Sound Partners Ltd. Prior to joining Sound Partners, Alastair reported to Nokia s European management team and worked with many of Nokia s customers to implement market firsts ranging from the introduction of prepaid mobile tariffs to new mass-market content services. Previously, Alastair worked in a number of roles for the BT Group, focusing on the evolution of wireless services, networks and technologies. He also contributed to international research and standardisation of GSM, DECT and 3G. Alastair holds BSc and PhD degrees from UMIST, where he was awarded the IEE Prize for top student. Analysys Research Limited 2006 Contents

6 vi Forecasting the Commercial Impact of Wireless VoIP in the USA and Western Europe Alex Zadvorny (Senior Analyst) specialises in European mobile markets and has written and contributed to Analysys Research reports, including Pricing Mobile Services for Success: towards a bundled future, Evaluating the Options for Mobile TV and Radio Broadcasting in Western Europe, Making a Success of the Mobile Content Value Chain, The Western European Mobile Market: trends and forecasts and The Central and Eastern European Mobile Market: trends and forecasts He has also worked on a number of strategic custom projects. Having begun his career in Ukraine, Alex worked as an equity analyst in London for several years before joining Analysys. As well as a degree in Economics, he holds an MBA from INSEAD in France. Acknowledgements The authors would like to thank all those who assisted in the preparation of this report, especially Margaret Hopkins and Amit Nagpal for their comments, and Gordon Davies and Claire Varley for editorial support. Disclaimer Figures and projections contained in this report are based on publicly available information only and are produced by Analysys Research Limited independently of any client-specific work within the Analysys Mason Group. The opinions expressed are those of the stated authors only. Analysys Research Limited recognises that many terms appearing in this report are proprietary; all such trademarks are acknowledged and every effort has been made to indicate them by the normal UK publishing practice of capitalisation. However, the presence of a term, in whatever form, does not affect its legal status as a trademark. Analysys Research Limited maintains that all reasonable care and skill have been used in the compilation of this publication. However, Analysys Research Limited shall not be under any liability for loss or damage (including consequential loss) whatsoever or howsoever arising as a result of the use of this publication by the customer, his servants, agents or any third party. Contents Analysys Research Limited 2006

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