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SA analyst: China Tower will accelerate China’s VoLTE deployment

Source:c114 Date:2015-11-23 16:33

Zhejiang Mobile, Liaoning Mobile and Beijing Mobile announced the launch of VoLTE service recently. China Mobile is one step ahead in VoLTE commercialization, while China Telecom and China Unicom are unsatisfactory in the progress.

To this, Yang Guang, an analyst of wireless operator strategy at Strategy Analytics, said that VoLTE requires a relatively perfect network coverage of 4G network, or the requirement of business continuity in voice service can’t be met. Since China Telecom and China Unicom started the overall construction of 4G network one year later than China Mobile and the 4G network coverage level of China Telecom and China Unicom is far lower than that of China Mobile, China Telecom and China Unicom are short of required network basis of deploying VoLTE now.

On the other side, China Unicom’s 3G network coverage is relatively good, and the CSFB scheme from LTE to WCDMA system is a very mature 4G voice solution, so China Unicom lacks urgency of deploying VoLTE. For China Telecom, from the perspectives of industrial chain development and market competition, it’s really necessary to deploy VoLTE rapidly, so China Telecom wants to realize wide coverage of LTE network rapidly by taking advantage of low-frequency spectrum resources of 800 MHz, aiming to realize VoLTE deployment quickly. But such a spectrum refarming scheme still needs the regulator’s approval and there’s yet a long time before implementation.

However, Yang Guang believes that with the existing resources of three operators’ tower sites transferring to the China Tower Company, China Telecom and China Unicom are expected to use a large number of existing station site resources of China Mobile, and it might help China Telecom and China Unicom expand the 4G network coverage rapidly and help accelerate the deployment of VoLTE of these two operators.

Nationwide VoLTE launching will take a while

The publicity efforts of the VoLTE commercialization in various areas is far from the degree of being known by everyone when China Mobile launched 4G service. To this, Yang Guang notes it may indicate that China Mobile isn’t completely prepared for the nationwide VoLTE commercialization, and launching in several areas is still a bit pilot and in the process of exploration and improvement.

Yang Guang believes that China Mobile’s VoLTE commercialization choosing the local pilot approach at present is based on consideration of three main aspects. First, VoLTE has higher requirements for technology and it needs relatively perfect coverage of the network while China Mobile’s 4G network deployment is on high frequency bands and it do takes long time and heavy investment to reach better network coverage; second, VoLTE involves too many network elements, and there are far more system equipment vendors for China Mobile than global main operators. It leads to a great amount of work in system interwork and interoperability tests between different network elements and vendors; finally, in the aspect of business mode and tariff strategy, China Mobile should also think over how to price voice and video calls based on VoLTE and how to drive subscribers to migrate to VoLTE and protect the profit space of traditional voice services at the same time. It needs to be prepared before comprehensive commercialization.

Experience and strength will be accumulated through local low-profile commercialization currently and the market conditions will be formed. After that, the market may usher a new stage of the development of VoLTE.

Whether VoLTE commercial development is synchronized or not, the unbalance of three major operators’ market share structure will intensify.

China Mobile leads the 4G network construction and commercialization, leaving China Telecom and China Unicom far behind. And the initiative commercialization of VoLTE makes the industry worry about whether the unbalanced 4G structure will further intensify.

China Mobile has always been far ahead in the domestic mobile market. Though China Mobile’s development was restricted in the 3G era due to the technological system. But the way and timing of 4G licenses issuing have decided that the unbalance will surely intensify in the 4G era. We can say that the speed difference in the VoLTE deployment is the result of the unbalance but not the cause. Mobile communication is a market with Matthew Effect obviously, and there isn’t any opportunity to reverse this unbalanced condition with it simply relying on the market strength. Whether VoLTE is deployed or not, the unbalance may continue to intensify.

However, it is really difficult for operators with leading position in operator market to feel safe. In the present market, the greatest threat to operators is no longer other operators but OTT vendors. Global operators are thinking about how to fight against the competition from OTT vendors.

Yang Guang said,there is no case of operators competing successfully with OTT players, and it makes the global mobile industry pay great attention to China Mobile’s “3 new” integrated services based on VoLTE and RCS and they hopes China Mobile will explore a new way for the telecom industry.

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