Increase Data Revenues With... Voice?
By Eric Lin, Wed Oct 27 00:00:00 GMT 2004

Second generation 3G data networks, as well as metropolitan wireless networks, all have the technology and the bandwidth to sustain VoIP. Now companies are looking to leverage this capability.


Packet switched voice once was the promise of 3G. Then it became the rallying cry for 4G. Now it could be a reality somewhere in between. The next revision of CDMA 2000's high speed protocol, 1x EV-DO A, will give carriers the opportunity to implement voice over IP (VoIP) telephony using their high speed networks. CDMA 1x EV-DV developers are working to implement VoIP on their technology as well. Using either protocol, this move would allow traditional CDMA carriers to use their networks more efficiently, possibly lowering the cost of voice calls. However, it could also introduce competition from data-only CDMA networks that are cropping up.

WiMAX and other metropolitan wireless networks like Flash OFDM could offer yet more competition to the traditional cellular operators. These networks present an opportunity for wireline carriers or Internet service providers (ISPs), which are likely to launch them to compete with wireless carriers. As more voice customers cancel their landlines and become cellular-only callers, wireline companies are furiously searching for ways to win them back. VoIP handsets for these networks will no doubt crop up as they are starting to do for Wi-Fi networks. These could offer wireline carriers and ISPs a way to compete in the wireless voice space without having to launch a cellular network (or use an existing one through an MVNO agreement).

Because of new efficiencies in UMTS 3G networks, circuit switched voice is already much less costly to the operator than it was on 2G GSM networks. However not to be left out, the data-only protocol that will based on UMTS will also include a provision for VoIP. Equipment suppliers for this new technology, called TDD, are already working on base stations as well as handsets that will support voice calls using VoIP on the data-only network. TDD networks look to be even more rare than CDMA data-only ones, so these do not present any real threat to carriers. However they may present some threat to local bells that are not already working on an alternative of their own.

Voice over each of these wireless data networks offers at least one universal advantage -- it should be cheaper for the operators, and for the customers, than any circuit switched network. Price wars based on voice minutes alone could be mutually assured destruction for all involved. However each protocol and each carrier will have to sell its distinct advantages in coverage or actual data services it can offer in addition to voice, in order to maintain sufficient income. Whether making money from the voice bits, or the data services customers buy along with VoIP minutes, voice could be the driver to increase data revenues on 3.5G networks.