When it comes to decision-making, as a general rule, people like to be presented with options. That’s certainly true in political elections. Sometimes the differences between options is very clear and it’s easy to express a preference. Other times, there are trade-offs and the choice is more difficult. One has to carefully evaluate the potential long-term impacts of either choice. This is where the similarity with VoLTE, and specifically VoLTE roaming comes in.
Voting for International VoLTE
A logical next step for a mobile operator, after having launched VoLTE domestically, is to select the method for providing international VoLTE roaming to its subscribers. The number of domestic VoLTE networks is growing at the rate of about one launch per week. So inevitably, a very large number of operators will need to make a choice for a VoLTE roaming method, and possibly struggle with the available alternatives.
The number of operators with VoLTE launched has grown exponentially in the past few years, starting with 3 in December 2012, to 82 in August 2016 (source: GSMA).
Available Choices for VoLTE Roaming
Today, operators can provide roaming with a fallback to 3G roaming. However, if an MNO wants to reap the benefits of VoLTE to its full extent, the 4G roaming methods as defined by GSMA – S8 Home Routed (S8HR) and Local Break-Out (LBO) – are the future-proof way forward. But, like opposing candidates in an election race, they come with trade-offs.
S8HR is gaining traction in the market, due to its simplicity and potential for shorter time-to-market.
One result of S8HR is the transition from voice roaming minutes to data roaming packets. This change brings along a drop in revenues for the visited network, as the gain in data roaming revenues doesn’t compensate for the loss in voice roaming revenues. This effect may sound attractive for the home network operator, as S8HR will lower its roaming costs, but the flip side is that the wholesale department of this home network operator will lose mobile terminating revenues.
The S8HR voice minutes are now treated as data. They are transported back to the home network, bypassing the wholesale/carrier department of the operator, and revenue is no longer generated with the termination of voice into the home network. Depending on the specific situation of the mobile operator – whether more inbound or outbound roaming – S8HR can also make the net spend less favorable.
Watch this space for more to come on the tradeoffs of LBO.