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WHITEPAPERMobile Voice Whispers of Change?This whitepaper is an extract from:Mobile Voice StrategiesmVoIP Opportunities & Business Models, 2010-2015. . . information you can do business with

Whitepaper: Mobile Voice Whispers of ChangeMobile Voice Whispersof Change1. IntroductionVoice remains the most important element within the broader mobile telecoms market;however several threats exist to this mainstay of operator revenues. Indeed, the role thatvoice plays in the telecommunications ecosystem of the future will be very different fromtoday owing to unprecedented structural, competitive and technology drivers.On one hand, mobile operators’ penetration rates have reached saturation in developedmarkets, bringing about unprecedented competition. On the other hand, Voice over IP isbecoming an increasingly important driver for change in the mobile operator community, ashandsets become more and capable of efficient data carriage and faster data speeds enableefficient voice over IP on the mobile networks.In addition, WiFi will become more capable of voice carriage. This may relieve pressure onoperators’ networks, but it will also allow third parties the opportunity to start offering voiceservices.Meanwhile, regulatory pressure will only increase on operators to accept VoIP on theirnetworks in the interest of “net neutrality”- the concept whereby services such as voiceshould be allowed on operators’ networks, irrespective of the technology used.However, while pressure is being exerted on the voice market from various avenues, such asincreased competition and new technology options including mobile Voice over IP, voice trafficremains the mainstay of mobile carriers’ revenues.Juniper Research’s report, Mobile Voice Strategies: mVoIP Opportunities & Threats for 2010-2015explores how the voice market will develop, particularly with the advent of Voice over IP inthe near to medium term.The pressures on the voice sector illustrated in this report are real and will have a profoundeffect on the role that voice will play in the revenue mix in the future. But despite thetechnological and competitive pressures, voice revenues are not going to disappear, eventhough pricing will continue to fall. Data revenues will not entirely offset this decline but willdo so to some extent.Page 1Juniper Research 44 1256 830002

Whitepaper: Mobile Voice Whispers of Change2. Outlook for Voice PricingAccording to the OECD Communications Outlook 2009, “between 2006 and 2008, mobilephone prices fell on average by 21 per cent for low-usage consumers, 28 per cent for mediumusage and 32 per cent for subscribers with the highest consumption patterns.”While the pressure on voice pricing is most acute in developed markets, where penetrationrates have reached or surpassed 100%, emerging markets operators also see margin pressureon their voice business. This is largely because, in order to increase their subscriber base, theywill have to offer services to those that until now have been unable to afford mobile telephony.There is, in developed markets, significant growth in mobile broadband connections that willfuel the growth in the transfer of mobile voice over IP. Mobile operators have significantlyincreased their 3G coverage, while also upgrading to HSPA (High Speed Packet Access)technologies in urban areas. 3G roll out is instrumental in bringing about change in the voicemarket, since it allows for the carriage of voice over IP over the cellular network, somethingwhich is not possible over 2G or 2.5G networks.Mid to long-term, operators will migrate to LTE (Long Term Evolution) as the principle accessnetwork technology. This will enable them to offer super-high broadband speeds of up to 50Mbps and cope with increasing volumes of data traffic. Despite the cost and question marksover return on investment for LTE roll outs, the European Commission has committed toinvesting more than 700 million over the period 2007-2013, in the research and developmentof next-generation mobile access networks (e.g. LTE), according to the ITU.In terms of pricing, the value of voice will continue to come down in value. Howeverincreasingly, voice will not be able to be seen in isolation from the broader voice and datauniverse. While operators may charge nominally less for the voice part of a subscription,competitive pricing for voice will only be available if it is sold as part of a broader data andvoice package.The end-user will almost certainly get increased value, but may also be paying a similar amount,or, in certain instances more, for their overall communications bill.When considered in this light, operators accepting VoIP traffic on their networks becomesunderstandable since it is opting for the best method of carriage for a certain data type. Shortrange WiFi, on one hand, and mobile VoIP on the other, (which can be carried over severaldifferent technologies) will have an important impact on the development of the voice market.Indeed, their impact is a major theme of juniper’s report.3. Mobile VoIP: Description andMarket ImplicationsThe advent of IP based voice to the mobile network, and the advent of the all IP networkwhich LTE represents, signifies the most important change in how data and voice is carriedover the mobile networks in the last two decades.In a nutshell, Mobile VoIP can be defined as the carriage of voice traffic over mobile networksusing the Internet protocol, usually via an enabling technology called SIP (Session InitiationProtocol). Mobile VoIP differs from circuit switched mobile telephony in that an end to endconnection between two carriers does not need to be established. With VoIP, in simple terms,Page 2Juniper Research 44 1256 830002

Whitepaper: Mobile Voice Whispers of Changethe voice call is fragmented into packets at the call initiators end, transferred over the internet,and reassembled at the call destination.Since no end-to-end link is required for the duration of the call, Mobile VoIP renders obsoletethe interconnection and roaming agreements that mobile operators around the world haveforged with one another, thereby resulting in a far cheaper mode of voice carriage for the enduser.4. User ForecastsJuniper Research forecasts the number of Mobile VoIP users to exceed 100 million by 2010.Of 107 million mobile VoIP users by 2012, over half will reside in North America and Europe,owing to the fact that 3G, which is required for mobile VoIP to be effective, has been rolledout in those regions.Figure 1: Number of Mobile VoIP users (m) 2010-2012 by 8 Key RegionsAfrica & Middle East120Rest of Asia PacificIndian Sub ContinentFar East & ChinaCentral & Eastern EuropeWestern Europe02010Latin America20112012North AmericaSource: Juniper ResearchIndeed, by 2012, there will be significant uptake of mobile VoIP in its various different flavours,with both 3G and WiFi networks supporting mobile VoIP apps. In addition, several operatorsare developing relationships with mobile VoIP players such as Skype and Truphone.Order the Full ReportThis whitepaper is taken from Juniper Research’s report Mobile Voice Strategies: mVoIPOpportunities & Business Models 2010-2015’, which investigates the opportunity for mVoIP for new entrants and established operators.Page 3Juniper Research 44 1256 830002

Whitepaper: Mobile Voice Whispers of ChangeThis detailed report provides an in-depth view of the mobile voice market, analysing andprojecting the market for the entire mobile voice ecosystem and how it will develop over thenext five years. It considers the outlook for VoIP pricing and provides a comprehensiveroadmap for the development of VoIP over 3G and 4G networks.Key forecasts include the number of 3G subscribers using VoIP, as well as the value of trafficcarried over VoIP networks split by mobile VoIP applications and mobile VoIP alliances withoperators. It also forecasts the number of VoIP minutes used as well as traffic value and userforecasts for 4G mobile VoIP. This strategic report also forecasts the number of minutes andassociated revenues lost to VoIP over WiFi connections.The report includes an in-depth discussion on the value of mobile VoIP and its role in thefuture of the mobile voice market. It also includes an exploration of the technologies usedwithin the voice market, providing analysis the various methods of how voice will be carriedover the 4G networks.Key questions answered by this report: How many mVoIP users will there be worldwide by 2015?What are the key drivers for the deployment and adoption of mVoIP?How will Application stores change the market?What options do traditional operators have in the light of mVoIP?How much traffic will be lost to WiFi in the five years to 2015?For more details on this report visit the website www.juniperreserach.com or phone 44 (0)1256 83002.Juniper Research LimitedJuniper Research specialises in providing high quality analytical research reports andconsultancy services to the telecoms industry. We have particular expertise in the mobile,wireless, broadband and IP-convergence sectors. Juniper is independent, unbiased, and able todraw from experienced senior managers with proven track records.Publication DetailsPublication date: June 2010Author: Anthony r Research Ltd, Church Cottage House, Church Square, Basingstoke, Hampshire RG217QW UKTel: 44 (0)1256 830002/475656Fax: 44 (0)1256 830093Further whitepapers can be downloaded at http://www.juniperresearch.comPage 4Juniper Research 44 1256 830002