A new study from Juniper Research has found that mobile operator voice revenue will drop to $208 billion by 2024 from $381 billion in 2019, as users continue to prefer more flexible and free OTT (Over-the-Top) services.
The new research, Mobile Voice: Emerging Opportunities for Operators & Vendors 2019-2024, forecasts that third-party OTT voice services will continue to grow; nearing 4.5 billion users by 2024. The study found that while this trend will contribute to declining voice revenue for operators, 5G proliferation will propel a number of nascent mobile voice and video services; generating fresh revenue streams for service providers.
Operator Voice Revenue Falls, as OTT managed VoIP Users Continue to Grow
The research forecasts that operator voice revenue will decline by 45% by 2024, in the face of an increase of 88% in the total number of third-party OTT mVoIP users over the next five years. The study urges operators to invest in AI-enabled communications platforms that facilitate competitive voice service delivery.
However, the research anticipates that improved 4G coverage and a growing number of capable devices will boost the number of mobile video call users; partially offsetting voice revenue losses. The study forecasts that ViLTE (Video over LTE) operator revenue will exceed $33 billion by 2024.
RTI (Real-Time-Interaction) and Vo5G (Voice Over 5G)
The report anticipates that 5G proliferation will generate new revenue streams for operators by enabling innovative use cases for VoLTE and ViLTE. The study notes that high data throughput and low latency will propel emerging services such as RTI, remote control and Vo5G, which will find wide application across a range of industries.
Additionally, the research prompts operators to accelerate VoLTE launches, in order to benefit from emerging Vo5G services. The study notes that establishing a 5G-enabled IMS (IP Multimedia Subsystem) infrastructure for VoLTE will provide a pivotal foundation for future voice services rollouts, which operators can monetise in upcoming years.
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Juniper Research provides research and analytical services to the global hi-tech communications sector, providing consultancy, analyst reports and industry commentary.
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The worldwide telecom equipment market grew 6 percent year-over-year (Y/Y) in the past twelve months, according to a new Dell’Oro Group report. The majority of growth was driven by Mobile RAN and Optical Transport sales. Equipment manufacturer revenue in these two technology areas grew 10 percent and 8 percent, respectively.
The telecom equipment market shifted into a growth phase in 3Q 2018 after three years of decline. As a result, the market’s growth for the trailing four-quarter period ending 2Q 2019 was up significantly from a bottom reached in 2017. Most of the leading vendors gained revenue during this period with the highest percentage increases obtained by Samsung, ZTE, and Ciena.
Although Huawei was placed on the U.S. Entity List in late May, restricting its purchase of U.S. components without a license, the company seems to have avoided any negative impact on sales of telecom equipment. For the trailing four-quarter period (3Q18 through 2Q19), Huawei held the highest share of the telecom equipment market at 28 percent.
Nokia captured the second-highest share in the period due to its strong position in each of the seven technology segments included in the Telecom Equipment Market report. Nokia was a top vendor in each product category.
Global Telecom Equipment Market Share:
Dell’Oro’s market share rankings cover the entire telecom equipment industry and are inclusive of everything from Mobile Radio Access Network (RAN) to optical transport to routers to switches to packet cores and microwave transmission and mobile backhaul.
Huawei’s ability to grow its share through 2019 is noteworthy considering the Chinese tech giant is in the eye of the trade war between the U.S. and China, a battle that has global implications. Many (like this author) believe that the company is being used as a bargaining chip by the U.S. in that trade war. For example, President Trump banned some U.S. companies from doing business with Huawei on national security grounds, though it’s also viewed primarily as a negotiating tactic.
However, the ban may initially affect only Huawei’s smartphone business, which is #2 in the world. It relies on components from U.S. suppliers and the Android OS from Google. The company’s networking business — which includes cellular base stations, optical transport, Ethernet switches, routers and transponders– may be more insulated from the effects of the U.S. ban, given that sales cycles among global telecom service providers are much longer when compared with smartphone buyers.
Further, Huawei’s networking equipment has long been implicitly forbidden among major US telecom service providers, so the Chinese supplier has little to lose, except for sales of mobile base stations to rural U.S. carriers as per this IEEE Techblog post.
The Dell’Oro Group Advanced Research: Telecom Equipment Market Report is a compilation of the findings of seven research programs conducted by Dell’Oro Group. These research programs are:
Broadband Access and Home Networking, Carrier IP Telephony, Microwave Transmission & Mobile Backhaul, Mobile Radio Access Network, Optical Transport, Router & Carrier Ethernet Switch, and Wireless Packet Core. For more information, please contact us by email at firstname.lastname@example.org.
VoLTE and Carrier Telephony:
In a separate report, Dell’Oro said that the worldwide Voice-over-LTE (VoLTE) infrastructure market revenues grew 16 percent Year-Over-Year (Y/Y) in 2Q 2019, as the Asia Pacific region took the leading role in licenses shipped, growing 62 percent Y/Y.
“It appears the tipping point of preparing 5G networks for voice with VoLTE is upon us as indicated by the growth rate we saw in 2Q 2019,” said Dave Bolan, senior analyst at Dell’Oro Group. “Licenses shipped to service providers in China and India accounted for most of the 62 percent growth in the Asia Pacific region. With 5G services expected to launch in October 2019, Chinese service providers are aggressively trying to migrate their 1.2 B LTE subscribers to VoLTE. Currently only about half are using VoLTE,” continued Bolan.
“In addition, the market in India is seeing a rapid shift to VoLTE services. For example, service provider Reliance Jio, had over 331 M VoLTE subscribers with a 54 percent Y/Y growth rate,” Bolan added.
Additional highlights from the 2Q 2019 Carrier IP Telephony report include:
- The top three ranking VoLTE vendors were Huawei, Nokia, and Ericsson
- Circuit switched core market revenues were down 21 percent Y/Y
- The IMS Core market revenues were up 13 percent Y/Y
- The Carrier IP Telephony market was up 5 percent Y/Y
The Dell’Oro Group Carrier IP Telephony Quarterly Report offers complete, in-depth coverage of the market with tables covering manufacturers’ revenue, shipments, and average selling prices for both wireline and wireless voice core markets. The segments include soft switches, media gateways, session border controllers, voice application servers, IMS CSCF and HSS, and legacy mobile switching centers. To purchase this report, please contact us at: email@example.com.
Dell’Oro Group is a market research firm that specializes in strategic competitive analysis in the telecommunications, networks, and data center IT markets. Our firm provides in-depth quantitative data and qualitative analysis to facilitate critical, fact-based business decisions. For more information, contact Dell’Oro Group at +1.650.622.9400 or visit www.delloro.com.
Pre-standard “5G” roll outs continue and the latest Evolution of LTE to 5G report from GSA identifies 884 operators actively investing in LTE, with 769 operational LTE networks in 225 countries, 194 VoLTE capable networks and 296 operators in 100 countries investing in 5G with 39 – 3GPP Release 15 (5G NR NSA) compliant 5G networks launched – some with limited service.
High end devices are also growing in popularity with more CAT-12 and above devices coming to market and 100 5G devices now announced. GSA expects 5G to be deployed much faster than 4G which took 7 years to reach 100 million subscriptions. We expect 5G to reach 100 million subscriptions in less than 5 years.
GSA Market Research Findings:
• 884 operators actively investing in LTE, including those evaluating/ testing and trialling LTE and those paying for suitable spectrum licences (excludes those using technology neutral licences exclusively for 2G or 3G services).
• 769 operators running LTE networks providing mobile and/or FWA services in 225 countries worldwide.
• 194 commercial VoLTE networks in 91 countries and a total of 262 operators investing in VoLTE in 120 countries.
• 304 launched or launched (limited availability) LTE-Advanced networks in 134 countries. Overall, 335 operators are investing in LTE-Advanced technology in 141 countries.
• Ten launched networks that support user equipment (UE) at Cat-18 DL speeds within limited geographic areas, and one supporting Cat-19 (in a limited area).
• 228 operators with TDD licences and at least 164 operators with launched LTE-TDD networks.
• 151 operators investing in NB-IoT in 72 countries; of these, 98 NB-IoT networks are deployed/launched in 53 countries. 62 operators are investing in LTE-M/Cat-M1 in 36 countries; of these, 38 LTE-M/Cat-M1 networks are deployed/commercially launched in 26 countries. • 296 operators in 100 countries have launched with limited availability, deployed, demonstrated, are testing or trialling, or have been licensed to conduct field trials of mobile 5G or FWA 5G.
• 56 operators in 32 countries have announced the deployment of 5G within their live network.
• 39 operators have announced 3GPP 5G service launches (or limited service launches).
The drivers of LTE, LTE-Advanced, LTE-Advanced Pro and increasingly 5G, for operators are more capacity, enhanced performance and improved efficiencies to lower delivery cost. Compared with 3G, LTE offered a big step up in the user experience, enhancing demanding apps such as interactive TV, video blogging, advanced gaming and professional services. Deployment of LTE-Advanced technologies – and particularly carrier aggregation – takes performance to a new level and is a major current focus of the industry. Interest in LTE-Advanced Pro is high too, bringing with it new, globally standardised LPWA solutions – LTE Cat-M1 (LTE-M, eMTC) and Cat-NB1 (NB-IoT) – and new business opportunities. And while LTE-Advanced and LTE-Advanced Pro solutions have yet to be deployed by the majority of operators, vendors and network operators are already looking towards 5G and its potential to meet future capacity, connectivity and service requirements.
Spectrum for LTE deployments:
Pressure for spectrum is high and operators need to deploy the most efficient technologies available. LTE, LTE-Advanced and LTE-Advanced Pro services can be deployed in dozens of spectrum bands starting at 450 MHz and rising to nearly 6 GHz. The most-used bands in commercial LTE networks are 1800 MHz (Band 3), which is a mainstream choice for LTE in most regions; 800 MHz (Band 20 and regional variations) for extending coverage and improving in-building services; 2.6 GHz (FDD Band 7) as a major capacity band; and 700 MHz (with variations in spectrum allocated around the world) again for coverage improvement. The now-completed LTE standards enable the possibility to extend the benefits of LTE-Advanced to unlicensed and shared spectrum.
There are several options for deploying LTE in unlicensed spectrum. The GSA report LTE in Unlicensed and Shared Spectrum: Trials, Deployments and Devices gives details of market progress in the use of LAA, eLAA, LTE-U, LWA and activity in the CBRS band.
Many recent allocations/auctions of spectrum have focused on licensing unused spectrum – including pockets of spectrum in the 2 to 4 GHz range, but also at lower frequencies – for LTE and future 5G services. This spectrum is sometimes dedicated to LTE, sometimes to 5G and sometimes allocated on a technology-neutral basis.
VoLTE global status:
In total GSA has identified 262 operators investing in VoLTE in 120 countries, including 194 operators that have launched VoLTE voice services in 91 countries. There have been recent launches in India, Hungary, Iran, Maldives, Kenya, Mexico, Tuvalu, Ireland, New Zealand and Nieu.
GSA is aware of at least 30 operators deploying VoLTE and nearly 40 other operators planning VoLTE or are testing/trialling the technology. The GSA report VoLTE and ViLTE: Global Market Update, published in August 2019, gives more detail.
LTE-Advanced global status:
Investment in LTE-Advanced networks continues to grow. By July 2019, there were 304 commercially launched LTE-Advanced networks in 134 countries. Overall, 335 operators are investing in LTE-Advanced (in the form of tests, trials, deployments or commercial service provision) in 141 countries.
Many operators with LTE-Advanced networks are looking to extend their capabilities by adding 3GPP Release 13 or Release 14 LTE-Advanced Pro features, e.g. those making use of carrier aggregation of large numbers of channels, or carriers across TDD and FDD modes, LAA, massive MIMO, Mission-Critical Push-to-Talk, LTE Cat-NB1/NB-IoT or LTE-M/Cat-M1.
The GSA report LTE in Unlicensed and Shared Spectrum: Trials, Deployments and Devices tracks the progress of LAA/eLAA, LWA and LTE-U. By July 2019, there were 37 operators investing in LAA (including eight deployed/launched networks), 11 operators investing in LTE-U (including three launched/deployed networks) and three investing in LWA (including one launched network). One operator had undertaken trials of eLAA.
Carrier aggregation has been the dominant feature of LTE-Advanced networks. Varying numbers of carriers and varying amounts of total bandwidth have been aggregated in trials and demos, but in commercial networks, the greatest number of carriers aggregated (where we have data) is five. Some trials and demos have also aggregated up to ten carriers, for instance SK Telecom’s trial in South Korea.
Pre-standard 5G global status:
GSA has identified 296 operators in 100 countries that have launched (limited availability or non-3GPP networks), demonstrated, are testing or trialling, or have been licensed to conduct field trials of 5G-enabling and candidate technologies (up from 235 operators in May 2019).
Detailed analysis of speeds and spectrum used for 5G trials to date is available in the report Global Progress to 5G – Trials, Deployments and Launches on the GSA website. Operators continue to provide clarity about their intentions in terms of launch timetables for 5G or pre-standards 5G. GSA has identified 56 operators in 32 countries that have stated that they have activated one or more 5G sites within their live commercial network (excludes those that have only deployed test sites).
The number that have announced the launch of commercial services remains much lower however, as operators have had to await the availability of 5G devices. These have now started to appear, removing the market blockage.
GSA has identified 100 announced devices (excluding regional variants and prototypes) and a handful of these are now available for customers to buy and use. See GSA’s report 5G Device Ecosystem, published monthly, for more details.
GSA knows of 39 operators who have (as of 6 August 2019) announced 3GPP compatible 5G service launches (either mobile or FWA, some with limited availability): we understand there are ten operators with FWA-only services, 15 with mobile-only services, and 14 with both mobile and FWA services. All services are initially restricted in terms of either geographic availability, devices availability, or the types and numbers of customers being provided with services.
Among recent service launches (or limited service launches) are those by three operators in Kuwait (Viva, Zain and Ooredoo), Batelco in Bahrain, T-Mobile and Vodafone in Germany, Vodafone in the UK, Digi Mobile in Romania, Monaco Telecom and Dhiraagu in the Maldives.
Cellular LPWANs for IoT:
The start of 2019 has continued to see strong growth in the number of cellular IoT networks based on NB-IoT and LTE-M. By July 2019, there were 151 operators investing in NB IoT in 72 countries, up from 148 operators in 71 countries in May 2019. The number of deployed/launched NB-IoT networks was 98 in 53 countries, up from 78 operators in 45 countries in January 2019. There are 62 operators investing in LTE-M networks in 36 countries, up from 57 operators in 34 countries in January 2019. Thirty-eight operators have deployed/launched LTE-M networks in 26 countries, up from 30 operators in January 2019. Orange Spain launched its LTE-M network in June 2019.
Altogether 55 countries now have at least either a launched NB-IoT network or a launched LTE-M network and 24 of those countries have both network types.
GSA will continue tracking the progress of 5G deployments worldwide. GSA reports are compiled from data stored in the GSA Analyser for Mobile Broadband Devices/Data (GAMBoD) database, which is a GSA Member and Associate benefit.
Much of the GSA activity is working on spectrum and the upcoming WRC-19 conference in October/November. If you would like to meet up with GSA in Sharm el-Sheikh, Egypt at the conference, please email firstname.lastname@example.org
By Diane Myers, senior research director, IHS Markit
Global service provider voice over Internet Protocol (VoIP) and IP multimedia subsystem (IMS) product revenue fell to $4 billion in 2018, a year-over-year decline of 8 percent. Overall worldwide revenue is forecast to decline at a compound annual growth rate (CAGR) of 2 percent from 2018, falling to $3.6 billion in 2022. This decline is caused mainly by slowing voice over long-term evolution (VoLTE) network deployments and competitive factors leading to lower prices. Big sales volumes continue in India and China, but pricing in those two countries is lower, which is stunting growth.
Huawei was the leading vendor in 2018 with 27 percent share of global revenue. Huawei was followed by Nokia with 23 percent and Ericsson with 20 percent. ZTE and Ribbon Communications rounded out the top five. For the full year, Nokia and Metaswitch were two noteworthy vendors posting revenue growth.
Service provider VoIP and IMS Market Highlights
- North America was the only global region to post year-over-year growth in 2018, with VoLTE expansion and new rollouts, most notably by Sprint and Shaw. Sales in the region grew 7 percent in 2018, following a 7 percent decline in 2017.
- As of November 2018, 137 operators had launched commercial VoLTE services, with more coming every year, but launches have slowed. Europe Middle-East and Africa launched 80 services, followed by Asia-Pacific with 35, North America, with 15 and Caribbean and Latin America with 7.
Service Provider VoIP and IMS Equipment and Subscribers Market Tracker
Each quarter, the “Service Provider VoIP and IMS Equipment and Subscribers Market Tracker” from IHS Markit provides worldwide and regional vendor market share, market size, forecasts through 2023, analysis and trends for trunk media gateways, SBCs, media servers, softswitches, voice application servers, HSS, and CSCF.
IMS began as a 3GPP technology for 3G mobile networks, but has been adopted as a broader standard. It is in the development and early testing phase, and its impact remains to be seen. IMS builds on the SIP protocol.
IP Multimedia Subsystem (IMS) is a generic architecture for offering multimedia and voice over IP services, defined by 3rd Generation Partnership Project (3GPP). IMS is access independent as it supports multiple access types including GSM, WCDMA, CDMA2000, WLAN, Wireline broadband and other packet data applications. IMS will make Internet technologies, such as web browsing, e-mail, instant messaging and video conferencing available to everyone from any location. It is also intended to allow operators to introduce new services, such as web browsing, WAP and MMS, at the top level of their packet-switched networks.
IMS Release 7 is also the basis for the CableLabs PacketCable 2.0 standard which is currently under development. This is an architecture specific to service delivery over broadband cable networks which covers VoIP, cellular integration and enhanced telephony.
Some of the possible applications where IMS can be used are:
- Service Convergence (Caller-ID on TV, click to call from TV or web)
- Presence services
- Full Duplex Video Telephony
- Instant messaging
- Unified messaging
- Multimedia advertising
- Multiparty gaming
- Web/Audio/Video Conferencing
- Push-to services, such as push-to-talk, push-to-view, push-to-video
Following are highlights from the first quarter 2018 edition of the IHS Markit Service Provider VoIP and IMS Equipment and Subscribers Market Tracker, which includes data for the quarter ended December 31, 2017. Author is IHS Markit analyst Diane Myers.
Global service provider voice over Internet Protocol (VoIP) and IP multimedia subsystem (IMS) product revenue fell to $4.5 billion in 2017, a decline of 12 percent year over year. Overall worldwide revenue is forecast to decline at a compound annual growth rate (CAGR) of 3 percent, falling to $4 billion in 2022. This decline is due to the slowing of voice over LTE (VoLTE) network deployments and overall spending falling into a steady pattern. Downward pricing — because of continued competitive factors and large deal sizes in India, China and Brazil — is also dampening growth.
“The big story over the past four years has been mobile operators and the transition to VoLTE, which has been the number-one driver of VoIP and IMS market growth, along with voice over WIFI (VoWiFi) and other mobility services,” said Diane Myers, senior research director, VoIP, UC, and IMS, IHS Markit. “However, after initial VoLTE network builds are completed, sales growth drops off, as operators launch services and fill network capacity,” she added.
Huawei was the standout vendor in the VoIP and IMS market, with 26 percent of worldwide revenue in 2017. Ericsson ranked second, with 21 percent, followed by Nokia, ZTE and Ribbon Communications.
Service provider VoIP and IMS market highlights
- As large VoLTE projects in India and China continued to expand, the Asia-Pacific region ranked first in global revenue in 2017, accounting for 37 percent of the market. Spending from VoLTE projects in Asia-Pacific and Caribbean and Latin America continue, but it is not enough to move the worldwide market back into growth territory, primarily due to price compression in both regions.
- As of January 2018, 119 operators launched commercial VoLTE services, with more coming every year. However, new launches are slowing. Most VoLTE launches in 2017 occurred in Europe. There was also some expansion in Chinese provinces, due to growth from China Mobile; in Brazil, with Vivo; and in India, with Bharti Airtel.
Service Provider VoIP and IMS Equipment and Subscribers report synopsis
The quarterly Service Provider VoIP and IMS Equipment and Subscribers Market Tracker from IHS Markit provides worldwide and regional vendor market share, market size, forecasts through 2022, analysis and trends for trunk media gateways, SBCs, media servers, softswitches, voice application servers, HSS, CSCF and IM/presence servers.