Wireless 20/20, a broadband wireless advisory group, has conducted a study, which finds that offering value-added services such as VoIP has become critical for the monetization of 4G network investments. The research study shows that 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 further concludes that many operators could see an added improvement in their ROI by deploying cloud-based delivery solutions as compared to directly managing in-house VoIP platforms.
“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, principal consultant of Wireless 20/20, in a statement. “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.”
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. In addition to the large CapEx investment needed, the operating costs of an in-house solution are in the range of 30-40 percent of the total VoIP revenues, in addition to call termination charges. This adds both a financial burden and an organizational support burden, putting a drag on the profitability of VoIP services, even for the largest operators.
Sarkissian concluded, "We recommend that 4G operators include value-added VoIP services to their offers in order to monetize the full potential of 4G networks. The analysis demonstrates the viability of a hosted VoIP solution. The positive financial impact of VoIP can be maximized by implementing a cloud-based solution.”