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Interoperability is critical to the HD voice opportunity
15 February 2012
As most voice providers seek to differentiate themselves in the market — and generate more revenue — high definition voice is increasingly seen as a means to achieve these goals. However, interoperability between operators and technologies must be in place to enable HD voice services to interconnect and flourish
high definition voice
Beatriz Butsana-Sita explains how the BT global IP Exchange can help, with very little individual provider investment required. Co-sponsored feature: BT Global Telecom Markets
Beatriz Butsana-Sita: Interoperability services would enable
calls to break out onto other networks for termination on
HD-capable devices without loss of quality
A specialist wholesale intermediary such as BT can aggregate calls from different sources
Global retail revenue from cross-network HD voice services is expected to rise fast
Although mobile voice quality has improved over the years, it still does not approach the clarity level of a standard call over fixed switched infrastructure. Even when background noise and interference are excluded, mobile voice calling does not offer a clear sound experience.
Enter the BT IPX: it provides the opportunity for operators to differentiate themselves from their competitors by providing a significantly better voice quality experience. It supports global end-to-end HD voice services between operators across mobile, fixed and internet platforms.
Mobile operators across the world began offering HD voice services in 2009. By late 2011, the Global Mobile Suppliers Association (GSA) reported that HD voice had been launched in 31 countries with many more providers poised to offer it.
The GSA also reported that the device ecosystem — an essential requirement for wider HD voice deployment — was growing and there were already 60 different HD voice-enabled mobile devices on the market in 2011.
But most of the active HD services were available only to customers on the national network of their own operator, and only available to end users with HD-compatible devices.
All these factors have been barriers to the wider deployment of HD voice, which means that today it is still at the start of its expected adoption curve.
What is the HD voice opportunity?
Operators are enthusiastic about HD voice because of its potential to increase customer loyalty, lengthen call times and drive greater revenue generation. Information Observatory research commissioned by BT estimates that global retail revenue from cross-network HD voice services could reach $2.35 billion by 2015. As well as benefitting end users, this represents a growth opportunity for fixed and mobile network operators and service providers.
Research conducted by Skype revealed that average call duration can grow from 21 minutes for standard-definition calls up to 32 minutes for HD voice calls. That equates to a 45% increase in revenue and a substantial improvement in average customer satisfaction rates.
Operators know that managing the customer experience in saturated markets can be a key factor in lowering and controlling churn rates.
But telecoms operators don’t have the HD voice market to themselves. In the internet market several companies offer HD services. Skype, for example, has an HD codec for Skype-to-Skype calls. Google acquired HD voice codec provider GIPS. And application providers such as Nimbuzz or Bria offer HD voice applications for Apple’s iOS and for Android devices.
To ensure that HD call quality is not lost on the service borders of over-the-top providers, they need to consider introducing HD voice-in and voice-out interoperability services. This would enable their customers’ calls to break out onto other fixed and mobile networks for termination on HD-capable devices without losing call quality. This presents an opportunity for intermediary operators in the value chain, bridging the gap between pure internet and other network based services.
Additionally, fixed and mobile operators can offer on-net HD services over managed networks supported by transmission facilities capable of ensuring quality of service. Research has shown that customers would welcome HD voice calling and are likely to be prepared to pay a premium for it. BT research has revealed that 72% of users want their next device to be compatible with HD voice and 50% of VoIP customers would be willing to change operators to get better quality voice services.
Mobile operators have perhaps the most immediate opportunity to deliver and charge for cross-network national and international HD calling. It would enable their users to reach into other networks and connect with other operators’ roaming users. Take-up is likely to be quicker among mobile users because operators can handle mobile HD voice end to end with no transcoding issues.
Already some mobile operators offer a free HD voice upgrade to their customers with a compatible device. Mobile operators can also choose to roll out HD voice quickly in line with their handset replacement cycles.
Fixed network providers have the opportunity to enable HD voice calling from IP customer-premise equipment on managed networks, for example, IP devices on IP PBXs, mobile end points and devices equipped for OTT services.
There is also a range of enterprise HD services in the market — from both operators and hosted IP PBX providers. It’s predicted that business users will swiftly come to expect HD voice services - and demand it when they roam and make international calls.
Rising to the HD voice opportunity
All providers need to consider the opportunity — and challenges — of delivering HD services. Today, the HD voice market is new but traffic has the potential to increase quickly.
HD services use a variety of protocols and that brings complexity to the market. Following the traditional path of interconnect agreements would require operators to make considerable investments in money and effort. These would span legal, commercial and technical agreements; multiple gateways; and, the management of multiple signalling and routing systems. What’s more, operators would need to repeat the process for every other operator they wished to interconnect with — and that makes little sense.
Although the revenue picture is expected to change as the volume market arrives, the level of up-front capex investment that the traditional path would require now is unattractive to many operators, especially in today’s tough economic environment. But equally, ignoring the HD voice world is not an option as customers would most probably start churning to competitors.
What is the solution?
What’s needed is a specialist wholesale intermediary that can aggregate calls among all the communication providers involved. That specialist can open up new routes for HD services by providing cross-network connectivity, by supporting seamless signalling protocol, by offering inter-codec conversion and quality of service.
Crucially, this approach negates the need for individual operators to invest: their only capex burden would focus on the deployment of HD-ready technologies within their own networks.
Efficiently opening up the HD voice market therefore requires a third-party interoperability provider. This support is important in the market’s early days when the smaller traffic volumes and interoperability complexities are too great for every operator to manage independently. And when the market matures it will remain important as scale economies and downward price pressures come into play.
Enter the BT global IP Exchange (IPX). It is the interoperability enabler for HD voice and future HD services such as HD video calling. As an established multi-service interoperability provider, BT provides:
- A neutral access hub to enable the sharing of sensitive data and complex financial relationships in an environment of trust
- Management of many relationships through a single access point with the hub providing access to the largest possible number of interconnect providers
- Simplicity of engagement to deliver interworking services in an efficient and cost-effective fashion
- End-to-end quality of service unlocking the value of inter-domain HD voice services by ensuring that the experience is superior to internet calling
- Highly automated processes to enable effective conversion or transcoding for customers, plus interworking across key service and network types
Already BT is well established in the IP interoperability space. Today, the BT IPX serves more than 200 UK and global customers. In just three months, the number of IP Exchange voice minutes it handles has increased by more than 50%.
BT sees the clear potential of HD voice. BT believes its enhanced sound quality — compared to TDM and standard VoIP — will help its wholesale customers reduce churn and drive revenue growth, making the migration to IP more sustainable.
Initially BT is offering free pass-through of HD voice on its global IPX platform. Moving forward, HD voice transcoding between different HD voice codecs — for example, between fixed and mobile operators — is likely to become a chargeable, value-add service. Transcoding will enable the interoperability between operators and technologies that must be in place to enable HD voice services to interconnect and flourish.
Providers will then be able to reap the benefits of HD voice. Interoperability will open the global market for HD voice services, delivering growth to operators and service providers around the world. GTB
Beatriz Butsana-Sita is managing director of BT Global Telecom Markets