4G – a hotly anticipated boost for the VoIP industry?

May 27, 2011

Since the launch of the 4G network, set to roll out in late 2012, there has been much debate about its implementation, most recently with accusations from MPs of Ofcom trying to ‘cash in’ on the auction for mobile networks to access the 4G ‘space’. One thing’s for sure, an international move to 4G will bring about a huge opportunity for VoIP providers, which are already increasing their share of the communications market.

Concerns about Ofcom lining its pockets aside, we can expect another tidal change in the way consumers use their mobile phones that first came about with the success of 3G technology and with the huge popularity of Apple and its rivals’ smartphones.

This shift has not only seen increased business for VoIP providers, but has caused a significant decline in business for traditional communications providers; 2009/10 saw a massive drop of 1 million fixed line users across the UK.

When 4G is rolled out, Ofcom anticipates it will give a minimum coverage of 95 per cent of the UK which, if accurate, may well see fixed line use plummet even further. As 4G has the possibility to provide current broadband speeds when out and about on mobile devices, it is possible that in our lifetime we’ll see the landline in its current form become completely out-dated.

The benefits of 4G are clear: it’s faster, gives VoIP providers more generous limits to the volume of calls they can handle, and it will be cost efficient, which will provide a welcome boost to the telecoms industry.

For consumers, 4G enabled devices are likely to be expensive to begin with, a luxury consumable that will become popular with tech geeks initially, followed by the image-conscious and eventually the rest of us. Coming as that will two to three years after the roll-out of 4G, it will by this stage be much more affordable and become the standard, in much the same way as 3G has.

Many TechWatch readers will be familiar with the benefits of the 4G system, which we expect will provide a secure all-IP based broadband solution to our everyday tech, including smartphones and laptops.

But while the VoIP industry is likely to benefit, traditional communications companies will need to move across from fixed line use, which has fallen away despite the higher cost of mobile calls. It seems consumers are prepared to spend a little more for the convenience and kudos of a smartphone over the traditional landline.

The success of 4G is also linked with the move towards IPv6, which I blogged about here in February. IPv4 is exhausted and the shift towards IPv6 is being hurried, perhaps, by the number of visitors expected in 2012 for the Olympics, all of whom will need an IP address to communicate with family and friends back home.

The shift to IPv6 will also remove the need for network address translation. Plus, NAT is not required to link devices on IPv4 to the new version. This should streamline the system, thus making it more efficient and potentially more profitable for the industry.

In the West, particularly in Britain and America, 4G is already being tested by some of the big communications businesses and major multinationals to see whether a switch would be feasible in the near future. Whilst this is good news for business at home, the real opportunity may come in developing economies, particularly in the Far East. Earlier this year the Sri Lankan telecom company Telecom Mobitel announced a successful trial of switching to 4G. It plans to roll this out in a national shift to 4G across the country.

There is still plenty of debate to be had about the roll out of 4G in Britain and, indeed, across the world, but it is clear at this stage that the new standard will prove an excellent opportunity for telecoms businesses in this country, particularly those with a strong handle on VoIP.


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