Social mobility

Juniper Research analyses the latest trends in mobile voice, video and chat services.
IP voice services are increasingly available via mobile devices.
IP voice services are increasingly available via mobile devices.

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Despite intense competitive pressure on the voice market and the disruptive influence of technologies such as IP, voice remains the mainstay of mobile network operators’ revenues worldwide.

This will remain the case over the forecast period; however, the advent of IP-based voice and video to the mobile network will accelerate as 3G is rolled out to ever more geographical regions. IP-based mobile voice will bring with it not only challenges but also opportunities for new entrants and existing players by changing the position of voice and video within the broader communications market.

Meanwhile the launch of Google’s mobile video chat service, Google Hangouts, and the recent tie-up between Skype and Facebook to offer browser-based video chat, indicate that video calling and video chat are becoming more a part of the communications mix than they ever have been. This is likely to have a knock-on effect on mobile video calling and mobile video chat. It also gives a glimpse of how, in the future, voice and video may become part of a wider communications platform created by social networking.

The advent of the all-IP network, which LTE represents the most important change in the way data and voice have been carried over the mobile networks in the last two decades. For reasons discussed below, IP, as a platform, changes the prospects for mobile video calling, even if it does not provide a means by which companies can monetise it.

Only recently are genuine quality mobile video calling services being offered over multiple devices and networks. However, this is still more difficult to achieve effectively over 3G networks than WiFi, and most players, such as Apple, do not offer services over 3G at all.

mVoIP defined

mVoIP (Mobile Voice over Internet Protocol) is essentially the transfer of a VoIP network infrastructure to the mobile environment. The most common method of implementation turns the mobile device into a standard SIP (Session Initiation Protocol) client, which then uses a data network to send and receive voice calls. Calls originating from the handset connect to the operator’s network through an IP interface; the call is then routed as packets across the Internet and terminated on a device at the destination of the call.

The basic structure of the mVoIP call is detailed below. The call itself can be split into three distinct phases. The first is its origination on the mobile handset, using either an app which may have been downloaded or is pre-installed on the handset. This may also be facilitated through an alliance between a VoIP service provider and an MNO. The second is its transit through the internet or cloud, and the third is its termination at the called party.

The call may be terminated in several ways.

• As VoIP, incurring no cost to the caller
• As a traditional standard circuit-switched call (mobile or fixed) incurring some payment to the mVoIP service provider
• As WiFi data traffic to a handset with WiFi capability, even though the call may have travelled across a cellular network. This avoids the termination rates that usually occur when landing mobile traffic using a rival’s network

The development of mVoIP

The mobile voice market will continue to comprise a large circuit-switched element for the foreseeable future, particularly in regions where infrastructure is less developed. Furthermore, mVoIP can be carried over various network types, such as 3G, LTE, WiMAX and WiFi. In addition, even where VoIP is carried over 3G it may terminate on a WiFi network. In practice, a proportion of traffic will terminate on circuit-switched networks. This terminating traffic (the best understood being Skype-Out traffic) will incur charges either on a pay-per-use or subscription basis.

Mobile video calling

Services such as video streaming and video calling use in the region require 25 times the capacity required for a voice call, and it is particularly important that latency and delay does not occur. For this reason, mobile operating companies are continuing to invest in network infrastructure. The challenges that mobile video calling presents can be attributed to the following three things: the requirement for high bandwidth and data speeds, the lack of a business model, and the lack of a standardised approach from a technical perspective.

Of these, one of the most pressing problems facing new mobile video calling service providers is the apparent lack, to date, of a business model behind mobile video calling, except for the benefits of a ‘land grab’ approach. The revenue generating capacity of video calling is inherently limited, since it has been offered for free by several players. Because the assumption exists that mobile video calling services are free, it is difficult to develop a charging model for mobile video calling, though value added services and advertising are likely to facilitate some revenue.

Standardisation and interoperability of mobile video calling services are yet to take place, and mobile video calling is dependent on factors that are outside the control of the provider of the mobile video calling service. Factors that may influence the quality of the mobile video call include the quality of the 3G network. Handset choices also affect what software is in use such as the operating system and choice of hardware elements such as cameras.

Market forecast

Juniper Research forecasts a steady increase in the number of mobile video callers across all regions over the forecast period, with the number of mobile video callers reaching over 134.6 million across all regions by 2016. Juniper Research anticipates that developed markets will see penetration rates of roughly double than those of developing markets.

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