AirvanaMobileVoIP1xEV DO 18 Jul 06 FINAL.doc

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Mobile VoIP over 1xEV-DO A Technical Whitepaper Paul Callahan VP, Business Development Airvana, Inc. pcallahan@airvana.com +1 978 244 1877 The Business Case for Mobile VoIP The combination of high performance mobile broadband and Voice over IP (VoIP) stands to usher in a new era for the wireless industry. This paper makes a direct comparison between VoIP over EV-DO and 1xRTT circuit-based networks. To date, CDMA2000 1xRTT has been the most spectrally efficient mobile voice network available,
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  Mobile VoIP over 1xEV-DO  ATechnical WhitepaperPaul Callahan VP,Business Development Airvana,Inc.pcallahan@airvana.com+1 978 244 1877  The Business Case for Mobile VoIP The combination of high performance mobile broadband and Voice over IP (VoIP) standsto usher in a new era for the wireless industry. This paper makes a direct comparisonbetween VoIP over EV-DO and 1xRTT circuit-based networks. To date, CDMA20001xRTT has been the most spectrally efficient mobile voice network available, but thecombination of VoIP and EV-DO – or broadband mobile VoIP – will represent a dramaticimprovement over all previous generations of mobile voice technology. ã   Higher voice capacity – Mobile VoIP promises to deliver up to 120% more voicecapacity than circuit-based mobile voice. ã   Lower costs  – Because they are packet networks end-to-end, VoIP-based mobilenetworks are easier to manage, more technology efficient, and lower cost to operatethan circuit-based mobile voice networks. ã   Faster development of applications and services    – Instead of taking years todevelop and deliver new services, operators can create new applications and servicesin weeks or months on mobile VoIP platforms. ã   Wider range of access networks    – Instead of being restricted to a single accessnetwork, VoIP applications enable operators to deliver services over multiple accessnetworks: EV-DO, wireline, home Wi-Fi, and public Wi-Fi.But these gains are dependent on technology developments in two critical areas: theemergence of a new class of mobile VoIP phones and enhancements to the radio accessnetwork (RAN) to specifically support VoIP and multimedia traffic. Mobile VoIP Phones & 1xEV-DO Rev A VoIP has become mass-market technology because of the widespread availability ofalways-on cable and DSL broadband Internet access. Though these are wiredconnections, ubiquitous Internet access has driven the development of packetizedtelephony and multimedia over IP. As a result, broadband-connected PCs support acombination of soft phones, instant messaging, collaboration tools, and video telephony.But two stumbling blocks have prevented the VoIP from entering fully mobile accessnetworks. Unlike mobile phones, laptops are not ideal for true mobility – they are portableat best. In addition, previous generations of mobile data networks did not support thestringent quality-of-service requirements that VoIP and multimedia applications demand.The development of mobile VoIP handsets and a RAN designed to carry delay-sensitivemultimedia traffic will change that picture. ã   Mobile VoIP phones emerge  – A new class of mobile phones will soon be delivered – based on packet VoIP instead of circuit technology – offering a wide range ofintegrated voice and multimedia applications. Connected to high-quality mobilebroadband, wireless VoIP phones will fuel rapid application and service innovation,and radically change the economics of operator networks. ã   1xEV-DO Revision A (Rev A) has been designed for VoIP    – Rev A has beenstandardized by the Third Generation Partnership Project 2 (3GPP2) and specificallyenhanced to support VoIP and multimedia applications with quality of service (QoS),high capacity reverse link, low latency air link, fast call setup, reduced packetoverhead, and rapid handoff. The Rev A RAN will be faster, higher quality,and lower-cost than any previous generation of mobile network. Mobile VoIP over 1xEV-DO 2  Shifting to Packet Rev A’s support for VoIP and multimedia services has tipped the balance between circuitand packet-based infrastructures. Because VoIP offers higher capacity voice and betterperforming data at lower operating costs, operators should begin capping investments inadditional 1xRTT circuit capacity. Capping Growth of Circuit-Switched Technologies As mobile VoIP handsets come to market, 1xRTT will become a less profitable meansto offer voice services. Why? ã   Voice average revenue per user (ARPU) continues to drop – Operators continue toreport the decline of voice revenue per user. For example, KDDI reports strong growthin data service ARPU, but a decline in voice 1 (see Figure 1). As a result, dollarsinvested in 1xRTT equipment will result in lower profit margin for operators. ã   Voice minutes continue to climb– As mobile operators continue to offer flat-rateand bulk voice pricing plans, mobile minutes of use (MoU) per month are increasing.Leap Wireless reports that 52% of their customers use mobile phones as their onlyphone service and talk an average 1,500 MoU per month 2 . Verizon Wireless customersincreased their MoU 16% in 2005 and T-Mobile reports that their customers talkedan average of 1013 minutes per month in Q1 2006 3 .   ã   Data is attracting higher ARPU customers – Newer, higher paying customers areattracted to broadband data. In the overall operator revenue mix, voice willincreasingly give way to data. Verizon Wireless, for example, reports a relatively flatARPU for combined voice and data, but rapid growth in data ARPU 4 (see Figure 2). 1 KDDI Financial Results 2 Leap Wireless Financial Results 3 T-Mobile Financial Results 4 Verizon Wireless Financial Results Mobile VoIP over 1xEV-DO 3    Figure 1: KDDI’s declining 3G mobile voice ARPU, Source: KDDIFigure 2: Verizon Wireless increasing data ARPU, Source: Verizon Wireless Mobile VoIP over 1xEV-DO 4
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