Cost effective VoLTE phones will be the next round of strategy focus for Mukesh Ambani and his team at Reliance Jio Infocomm.
You can get the live speech of Mukesh Ambani — through this YouTube video — when the richest Indian make announcements about the budget VoLTE phone and cheap 4G plans at the 40th annual general meeting of Reliance Industries (RIL) on July 21 at 11 am.
GSA, a telecom industry association, in October 2016 noted that operators worldwide are investing in VoLTE enabling an HD voice experience for LTE users. Vendors announced 696 VoLTE-capable devices including carrier and frequency variants, across all price points.
“The choice of VoLTE-capable devices has surged, largely due to market developments in India with the launch by Reliance Jio of its 4G/LTE network and the company’s decision to offer VoLTE-based voice service for LTE customers from launch,” said Alan Hadden, VP of GSA.
Mobile Internet on cheap phones
Accessing mobile Internet on cheap phones does not offer better customer experience to Indians. Since majority of Indian consumers are unable to spend for phones in the Rs 5,000 to Rs 10,000 price bracket, vendors started focusing on cheap phones. Chip makers such as Qualcomm and MediaTek supported the expansion mobile Internet networks in India with cost effective chips.
The highly competitive mobile broadband is the main focus area for Reliance Jio. Jio has 4G presence across all states. But the subscriber base is not growing in line with its $20 billion investment in networks. VoLTE phones will be a key solution for expanding its 4G subscriber base.
The good news for Jio is the fact that 4G was the major source of data traffic in India in 2016 with 60 percent of the incremental data payload from 2015 levels contributed by 4G, Nokia’s annual Mobile Broadband Index study of mobile broadband performance in India has revealed.
Nokia said though 4G coverage is yet to penetrate across all 22 telecom circles in India, 4G contributed to 13 percent of the total data traffic pan-India in a span of year since launch. Lack of seamless 4G experience is a concern for high-end data subscribers on any 4G network in India.
In metros alone, where the majority of 4G network deployments have taken place, the contribution of 4G to data traffic was 26 percent. 3G continued with its growth trend contributing to 63 percent of total data payload. Vodafone, Idea Cellular, BSNL and Airtel are still continuing its investment in 3G networks.
VoLTE to push service revenue
In the initial phase, Reliance Jio has started focusing on LYF smartphones, as part of its strategy to reach consumers with 4G phones. Jio offered 4G smartphones at reduced price points, ensuring that LTE and VoLTE are available with all phone models.
“We expect that the other players will follow suit and further reduce price points so that LTE and VoLTE become default features. Such smartphones will also have a market demand pull on the back of reduced data prices expected in 2017,” said Arpita Pal Agrawal, telecom leader at PwC India, in December 2016.
A report by SNS Research said that global VoLTE service revenue growth is set to grow at a CAGR of 34 percent between 2016 and 2020.
The global telecom industry believed that VoLTE is emerging as a mainstream voice and video calling service. VoLTE offers significant growth and revenue potential for mobile operators and allows them to compete directly with OTT companies such as Skype and Facebook.
SNS Research estimates that VoLTE customers will account for more than $200 billion in revenue by the end of the decade, with video and supplementary services expected to drive around 15 percent of that total figure.
“Telecom operators need to turn to technology that enables them to cost-effectively and rapidly both migrate their legacy services over to VoLTE and enables them to develop new VoLTE and ViLTE applications,” said Chris Haddock, head of Marketing at OpenCloud.
OpenCloud’s Chris Haddock warns that telecom operators such as Airtel or Reliance Jio cannot push VoLTE business at the expense of the voice services. Voice services continue to contribute majority of services income for Indian telecoms.
Before mobile operators can think about touting VoLTE as their new flagship product they need to ensure customers can still access the service capabilities that were available to them on 2G and 3G networks. Jio does not have 2G and 3G networks.
Voice quality on VoLTE feature phones will be tested by Indian phone users in coming months. The customer feedback will decide the future of Reliance Jio and Airtel and other operators in India.
Baburajan K
