In Business Model, Internet Access, Mobile, Spectrum

Business models for Voice over LTE and Voice over Wi-Fi are anything but simple. But there is a precdent: Wi-Fi hotspots.

For many years, the value of carrier-provided public hotspots was as an amenity or feature that made fixed or mobile Internet access more valuable. Hotspots offered higher speeds and stronger signals indoors.

More recently, private Wi-Fi has become an effective means for allowing mobile users to avoid mobile data charges, while boosting indoor coverage as well.

Some non-tradtional or attacking mobile carriers have relied on Wi-Fi to provide lower cost service, while also containing service provider wholesale capacity charges.

So far, the benefits of voice over LTE and carrier-branded Wi-Fi voice provide similar indirect benefits.

As often is the case, carrying voice and Internet access over a single network is more simple, in some respects, as operators are not delivering voice on 3G and data on 4G. But little in the way of direct new revenue is generated, in most cases.

Likewise for voice over Wi-Fi, whose primary value for a branded operator service is simply better indoor coverage, not necessarily enhanced revenue. To be sure, the feature might well lead to higher customer satisfaction. Carrier Wi-Fi voice should result in higher carrier voice usage, but whether that also leads to higher revenues is unclear.

In other words, the business value of Wi-Fi voice is equivalent ot providing a denser network of cell sites. The business value of VoLTE is management simplicity, and eventually the ability to reclaim 3G spectrum for next generation network use.

In many respects, the business value of voice carried over LTE or Wi-Fi is indirect, as generally has been the case for Wi-Fi hotspots.

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