Wireless Carriers Move to New Technology—for Voice

By THOMAS GRYTA

U.S. wireless carriers are working on a new way to deliver voice calls to make their networks more efficient.

While carriers have spent tens of billions of dollars developing and marketing their data networks, wireless voice calls still use technology rolled out more than 10 years ago.

Older networks were built for voice traffic with a data pipe running through it, but newer networks are for data only. To maximize efficiency, carriers aim to eliminate the dedicated voice channels needed by older technology and clear the airwaves for the latest standard, called long-term evolution, or LTE. To do this, companies are taking on the multiyear process of converting voice calls into Internet traffic so the same airwaves can be used for voice or data.

"As an industry, we spent 20 years building for voice capacity and 10 years fixing it that so that it would work for mobile data," said John Byrne, an analyst at research firm International Data Corp. "Now we look at this mobile-data network and have decided that this isn't the best way to deliver voice."

Replacing traditional voice service with voice over LTE will take time, as complex kinks are worked out, network equipment is installed and, eventually, phones are made with the necessary hardware. VoLTE, as the new technology is known, offers greater efficiency because once-dedicated voice space can also run data when not being used for voice calls, something the current technology doesn't allow.

Consumers aren't expected to see any difference in how voice calls work or sound during or after the transition, although better quality and enhanced services are possible. The change primarily will help carriers to stop juggling multiple platforms and to better manage surging wireless data traffic.

AT&T Inc. T +0.61%and Verizon Wireless plan to start rolling out VoLTE this year. Sprint Nextel Corp. S +0.51%and the T-Mobile USA unit of Deutsche Telekom AG DTE.XE +1.35%have committed to making the switch but haven't set a timeline. Prepaid carrier MetroPCS Communications Inc. PCS +3.25%has already installed VoLTE in most of its markets.

Because consumers won't experience direct benefits, it is important that carriers make sure customers don't have dropped calls or service interruptions during the transition. AT&T has spent years trying to repair its reputation for poor call quality in some markets. Verizon Wireless, a joint venture of Verizon Communications Inc. VZ +0.83%and Vodafone Group VOD.LN -0.25%PLC, has built a reputation on voice quality.

The costs to implement VoLTE are difficult to determine, said Jeremy Green, an analyst with London-based tech consulting firm Ovum. He recommended that carriers without pressing needs wait to see how the initial launches perform. "The opportunity to gain first-mover advantage is outweighed by the potential teething problems that the technology could face," he said.

Voice calling was a lucrative business for wireless companies for years, but voice traffic has declined as data consumption has grown. Network-equipment maker Cisco Systems Inc. CSCO -0.43%estimated that global mobile data traffic rose 70% last year and projected a 13-fold increase between 2012 and 2017. Because of that trend, AT&T and Verizon Wireless have geared their service plans toward data consumption while providing unlimited voice minutes.

While data demand grows, airwave capacity is in short supply and that makes it important to clear out older standards for new, more efficient technology. Verizon Wireless has said its fourth-generation, LTE network is five times more efficient than its 3G predecessor.

There also are benefits to having carriers on the same platform. "In an LTE world, you have a single common standard that is being fairly widely adopted across the globe," said Sprint network chief Bob Azzi. "That can lower costs for the network and the handsets."

Voice traffic on cellular networks currently is routed with what is known as a circuit-switched system. That means that when a call begins, the network essentially opens a path of communication for the duration of the session between the users.

LTE employs the Internet protocol, a more efficient, packet-based system that breaks up information into smaller chunks to be transmitted over the network. The delivery of voice calls using VoLTE is similar to the voice over IP, or VOIP, phone services offered by many cable and Internet-service providers.

Several hurdles remain before VoLTE is available for mass consumption.

"It is, from my perspective, not ready yet," Mr. Azzi said. The current cost of a VoLTE call is more expensive than one using the older network, but the move is really about investing in the future, he said.

Carriers and network operators are working to ensure that VoLTE calls will seamlessly hand off to older technologies when users move to areas with no LTE service. Battery life is also a concern when making a VoLTE call.

Nonetheless, the move to VoLTE is likely to continue. Oracle Corp.'s ORCL +1.20%$1.7 billion agreement this month to acquire network-equipment maker Acme Packet Inc. APKT -0.15%partly is an attempt by the business hardward and software company to get a foothold in VoLTE, analysts said.

Write to Thomas Gryta at thomas.gryta@dowjones.com

A version of this article appeared February 26, 2013, on page B6 in the U.S. edition of The Wall Street Journal, with the headline: Voice Calls That Piggyback on Data.

Culled from: Linked IN