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Tuesday, November 13, 2007

New Disruptive Analysis Report - 250m users of VoIPo3G by 2012

I've finally published the new Disruptive Analysis research study on VoIPo3G Business Models. The press release is given below and also here, and details of the report & contents are here.

250m users of VoIPo3G by 2012

VoIPo3G to be driven by both wireless carriers and independent challengers

LONDON, November 13th 2007 - A new research study from Disruptive Analysis shows that evolution of mobile VoIP will rapidly eclipse voice over WiFi and become a mainstream form of communication. The analyst firm predicts that the number of VoIPo3G users could grow from virtually zero in 2007 to over 250m by the end of 2012. This is comfortably in excess of the expected number of FMC users with dual-mode VoWLAN/cellular phones.

The report demonstrates that it will be the operators themselves which will be mainly responsible for the push towards VoIP being carried over cellular networks. Carriers will become increasingly attracted to VoIPo3G because it will enable them to fit more phone calls into their scarce spectrum allocations, reduce operating expenses by combining fixed and mobile core networks, and launch new services like push-to-talk and voice-integrated “mashups”. VoIPo3G also fits well with the move towards femtocells. Future generations of wireless technology – 3GPP LTE (Long Term Evolution), 3GPP2 UMB (Ultra Mobile Broadband), WiMAX – are “all-IP”, so unless mobile operators continue to run separate voice networks in parallel, they will inevitably transition to VoIP at some point.

However, because these new radio technologies are three to five years away from mainstream deployment – what happens in the meantime will provide the major disruption to operator business models. Some independent VoIP players are already exploiting the fact that today’s 3G networks can already support VoIP, putting dedicated software on smartphones, exploiting open operating systems, flat-rate data plans and features like “naked SIP” and built-in VoIP capability. These are linked to competitive ‘over the top’ phone or IM services via a mobile Internet connection.

At the same time, there is an increasing trend of carriers marketing 3G modems for PCs – not just for mobile computing, but also to compete with home DSL/cable broadband offerings. Laptop users expect to be able to use their normal broadband applications over 3G, including voice-based ones like Skype. Some operators are even offering their own VoIP software for PCs with wireless broadband.

The end-result of the push towards VoIPo3G is that by 2012, most VoIPo3G users will be using mobile carriers’ own standards-based VoIP capabilities, over the new, advanced 3G+ networks. However, a significant minority of about 60m will be using independent or Internet-based solutions – many actually operated in partnership with carriers or retailers.

Dean Bubley, author of the report and founder of Disruptive Analysis, comments: “3G networks are increasingly capable of supporting VoIP, for both traditional mobile operators and independent Internet-based VoIP challengers. But while CDMA operators will benefit from VoIP being ‘designed-in’ to their newest networks, 3GPP / HSPA operators will have to wait for several years – a window of opportunity which will be exploited by the ‘over the top’ players. Rather than competing head-on, partnership models have the potential to create win-win propositions”

The report, “VoIPo3G Business Models”, is available from Disruptive Analysis from today. It is based on a huge research effort spanning hundreds of interviews and meetings, and contains extensive market forecasts, industry commentary & analysis and company profiles.



Yes, 250m is a surprisingly big number. Especially when viewed against the VoWLAN users at the same time (below 100m). I did the sums and then had to triple-check my own model. But underlying it is one absolutely fundamental point:

If mobile operators roll out LTE or UMB, then VoIP is mandatory; they're all-IP networks, just as WiMAX is.

Now I've had to take a call on the realistic rollout schedules of those technologies, and if there are substantial delays, the VoIP forecasts move to the right as well. There's also an expectation that some operators will want to deploy VoIP earlier, on EVDO Rev A/B or HSPA/HSPA+ networks.
This morning's announcement about FarEasTone's VoIP service is a very timely example.

I've also built in analysis of spectrum-related issues, device availability, IMS and a hundred other factors. The full set of inputs and sensitivities are in the report's methodology section.

The key thing to think about is that for many users, VoIP will be invisible. For them, it will be an underlying enabling technology, not a service in its own right. Its prime function will be to enable operators to squeeze more calls into a given slice of spectrum. Yes, its other functions are more interesting - helping independent 'over the top' VoIP providers get a foothold in the mobile market, and facilitating a new generation of 'Non-telephony VoIP' services. But they will be comparatively small compared with its main manifestation as 'necessary plumbing'.

(Non-telephony VoIP means where voice is not used for a simple Person A calls Person B phone call, but is somehow a feature of another application - inside a game, linked to FaceBook or some other type of mashup or corporate web service)

The other angle to recognise is that almost all of these VoIPo3G users will also still be using circuit switching for some of their voice traffic. There will be very few all-IP users - most will fall back to GSM or UMTS or CDMA 1x or another network, either when out of 3.5G coverage or for other reasons.

f you're interested in more details & pricing for the full report, please email:
information AT disruptive-analysis.com
A table of contents of the report is available
I'll also be speaking at the upcoming IIR conference on VoIP & wVoIP in Madrid on the 26-28th Nov, and the Mobility World Congress in Hong Kong on Dec 2-5th

1 comment:

Anonymous said...

Nice one Dean!