US carriers divided on WiFi Calling

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The major US operators are gearing up to introduce WiFi Calling services, despite their early moves towards VoLTE. For Verizon and AT&T, the WiFi option is definitely a second string to fully fledged LTE voice, which will enable them to include a wider range of services and added value. But for T-Mobile, always the most WiFi-centric of the big four, the voice platform may be more central to its model.

Verizon’s CFO Fran Shammo said Verizon Wireless plans to introduce WiFi Calling in the middle of next year but that it was “never a top priority” because the carrier has achieved such good coverage with LTE. While wireline and WiFi-only operators are harnessing WiFi Calling – which can provide greater carrier control, mobile hand-off and QoS than purely over-the-top services – as an alternative to cellular voice, for mobile operators it is clearly a double-edged sword, only to be used as a fallback when there is a poor cellular signal. However, since Apple included support for the functionality in its iPhones last year, there has been some consumer pressure on operators to provide the option.

“We built our voice platform so extensively, there was never a need for us to tell our customers, ‘Oh, our network is not good enough so you need to go on WiFi to complete your call’,” Shammo said dismissively at a recent conference, and added that it is difficult for Verizon to guarantee QoS once a call moves onto WiFi, which can have a negative effect on customer experience and the carrier’s brand reputation for network quality.

AT&T’s mobile CEO, Ralph de la Vega, said last week that AT&T would launch WiFi Calling in 2015 too, but only as a complement to VoLTE and 3G voice, saying: “We don’t have this burning desire” to use it to enhance coverage. He added: “We’re very focused on making sure it’s a great experience for customers, but we see it as a complement, not a replace-ment. We feel good about a great nationwide network with unlimited talk and text.”

However, T-Mobile is already supporting WiFi Calling on the new iPhone (the only US operator to do so), although Sprint has the facility for its Android handsets. TMo is now making all its smartphones compatible with HD voice over WiFi, as part of its long-standing reliance on extensive WiFi offload, via its hotspot activities and its home routers.

The cellco has announced WiFi Unleashed, which allows all TMo customers to make free WiFi calls to the US from outside the country with their existing cellphone number.

“WiFi Unleashed is a game changer. This is like adding millions of towers to our network in a single day,” said CEO John Legere. “The difference between us and the traditional car-riers is that they’ll do everything they can to make more money off you. We’ll do everything we can to solve your problems, and today, that’s about uniting WiFi with our data-strong network for unprecedented coverage.”

Dish may still be lurking, though the satellite TV provider – which needs more spectrum and a network partner to make its LTE plans for its mobile satellite frequencies viable – has said it wants to wait to make a move until after the AWS-3 auction, when its airwaves position will be clearer, as will the real value of the various carriers’ assets. Jefferies commented: “Dish also does not necessarily fully satisfy the criteria, but offers a more compelling opportunity given its spectrum holdings, and video customer base.”

Meanwhile, AT&T is still hoping for approval for its own takeover of the other US satellite TV provider, DirecTV, and if this gets the green light, it will be able to use some of its rural spectrum resources more effectively to generate new customers and revenues. In particular, it proposes to bundle a new fixed wireless service, which it nostalgically calls ‘fixed wireless local loop’, with satellite TV packages from early next year. CEO Ralph de la Vega told a Goldman Sachs conference that his firm is looking at dedicating spectrum in rural areas to the new offering, installing a satellite dish and outdoor antenna in one visit to improve the usually difficult economics of rural wireless broadband with greater efficiency and higher ARPU potential.

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Caroline has been analyzing and reporting in the hi-tech industries since 1986 and has a huge wealth of experience of technology trends and how they impact on business models. She started her career as a journalist, specializing in enterprise and carrier networks and in silicon technologies. She spent much of her journalistic career at VNU Business Publishing, then Europe’s largest producer of technology publications and information services . She was publishing director for the launch of VNU’s pan-European online content services, and then European editorial director. She then made the move from publishing into technology market analysis and consulting, and in 2002 co-founded Rethink Technology Research with Peter White. Rethink specializes in trends and business models for wireless, converged and quad play operators round the world and the technologies that support them. Caroline’s role is to head up the wireless side of the business, leading the creation of research, newsletters and consulting services focused on mobile platforms and operator models. In this role, she has become a highly recognized authority on 4G systems such as LTE and WiMAX, and a prolific speaker at industry events. Consulting and research clients come from major mobile operators, the wireless supply chain and financial institutions.