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August 26, 2011

Monetizing 4G Network Investments Needs Value-Add, Small Business VoIP

 By David Sims, TMCnet Contributing Editor

Wireless 20/20 (News - Alert), a broadband wireless advisory group and the developer of the WiROI 4G Business Case Analysis Tool, has announced results of a study finding that “offering value-added services such as Small Business VoIP has become critical for the monetization of 4G network investments.”

According to the study, 4G wireless operators can “significantly” increase their ARPU and improve their ROI by offering Voice over IP (VoIP), “as compared to offering data only services.” The study looked at the differences in cost structure, profitability, time–to-market, back-office flexibility and the investment risk profiles of the two implementation options for a range of different types of operators.

Operators can see even more ROI with cloud-based delivery “as compared to directly managing in-house VoIP platforms,” added the study, titled “Maximizing Operator Value from VoIP Services.”

Launching 4G VoIP service will result in a 25-50 percent increase in ARPU, a 10 percent increase in IRR and a 5X-10X increase in NPV versus a data-only service strategy, the study found, and if you’d like to see those numbers, maybe you should look into it.

“Operators deploying VoIP over 4G networks are faced with a critical decision as to whether they should build and manage an in-house VoIP platform or partner with a cloud-based, hosted VoIP solution provider,” said Haig Sarkissian (News - Alert), Principal Consultant of Wireless 20/20.

It also found that deploying cloud-based hosted VoIP could further increase IRR by an additional five percentage point for many operators. In this competitive environment that’s nothing to sneeze at.

“We found that although the average VoIP revenue contribution per end-user is largely the same, the investments needed and the ROI vary drastically depending on whether an in-house approach or a hosted solution is used,” Sarkissian said.

In February TMC had the news that Convergys (News - Alert) announced the availability of the Convergys 4G offering, described by company officials at the time as a billing and customer care product designed to enhance telecom operators' ability to monetize their high speed voice and data network.

With mobile data consumption already pushing the boundaries of 3G and continuing to increase at an astounding rate, Convergys officials said at the time, telecom operators all across the world are looking to the faster, more reliable data speeds made possible by 4G technology to reduce the stress on their networks, improve customer satisfaction, and open the door to new offerings like high definition videos, 3-D experiences, and graphic-intensive games:

“Key to realizing this potential is the ability to monetize the network by launching new products, service bundles, and pricing models quickly.”

Want to learn more about the latest in communications and technology? Then be sure to attend ITEXPO West 2011, taking place Sept. 13-15, 2011, in Austin, Texas. ITEXPO (News - Alert) offers an educational program to help corporate decision makers select the right IP-based voice, video, fax and unified communications solutions to improve their operations. It's also where service providers learn how to profitably roll out the services their subscribers are clamoring for – and where resellers can learn about new growth opportunities. To register, click here.


David Sims is a contributing editor for TMCnet. To read more of David’s articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Stefanie Mosca

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