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Aruba

Inching towards VoIP over 3G

Last week’s Mobile World Congress in Barcelona was marked by the customary buoyant announcements, summarised nicely as always by Caroline Gabriel at Rethink Wireless: Peter Jarich is a little more colloquial here, but remains admirably concise. We will return to some of these topics in coming weeks (how well will cellular and Wi-Fi play together; will femtocells finally break through in 2010 or should that be 2015; will regulators free up more spectrum and will it go to licensed or unlicensed use…) but today we will chew on this Verizon Wireless release about skype mobile, and some recent testing of actual U.S. 3G data speeds.

The Verizon Wireless announcement is interesting because it strongly implies that the skype client on Verizon’s handsets will act like that on your PC, sending the voice call over the cellular data channel and effectively bypassing the carrier: in this case the carrier is the very same Verizon Wireless boosting the service. Since a data bit is worth a good deal less to Verizon than a voice bit, why would they be interested in cannibalizing their revenue stream in this way? The answer is that all is not as it seems… although no one really knows yet - the official announcement is terse, although further details are promised – This reported interview with a Verizon spokesman suggests that the service will follow the infamous iSkoot model.

iSkoot, a San Francisco startup, developed an architecture for delivering skype over cellular. The client on the phone shows the same user interface as skype on a PC, but in a crucial technical twist, calls are placed as standard voice-over-cellular calls to the carrier’s core network, where an iSkoot server transcodes them to the traditional skype-over-internet format. This service was first promoted (I believe) by the carrier ‘3’ in Hong Kong, the UK and probably elsewhere by now. It has some value for the consumer in that Verizon is promising skype rates for international calls (they will go VoIP over skype from the carrier’s POP, so there won’t be anything more for the carrier to pay in settlement) and the intensive skype user will see the same contact list, look and feel on the client, and be able to use IM in the usual way on a Verizon smartphone. The cost to Verizon is a local over-the-air call, and it’s not clear if they will waive that or deduct it from your minutes: that’s a tariff issue.

So we should applaud but not perhaps to the point of acclamation. This type of service is already available from others, with Google Voice perhaps the most obvious example. It’s interesting and encouraging that Verizon Wireless sees market demand for this type of service, even though the technology purists among us see it as a bait and switch (and remember that Verizon has not yet disclosed the service’s architecture, so this ever-so-righteous indignation may be sorely misplaced).

Which brings us to the question of whether VoIP over cellular data is a reasonable trick to attempt, as of 1Q2010.

Some engineers will tell you that cellular data services are not yet technically ready to carry voice traffic due to bandwidth, QoS and reliability issues. Our own dear carrier’s data services rep certainly opined along such lines last month, and we had one of the top-5 smartphone makers follow the same reasoning to a similar conclusion just this week. It is a long-held belief among the incumbents, but while I agree it was true a year ago, I am not nearly as sanguine about next year, and I would venture that today, in many parts of the country, VoIP over cellular is good enough for the mainstream user – or would be, if such a service were easy to get.

Engineers require figures, and some new ones were published this week. First, let us set the requirements. A VoIP call requires around 250Kbps (call it 125kbps each way), depending on the codec used and the encapsulation and headers. If we want to get good voice performance, we need a minimum bandwidth above that level, with end-to-end delay and jitter combined in the 200msec range (that’s the total delay budget, if we consider just the cellular data channel we would probably have around 100msec to play with). While this sounds puny when compared to the multi-megabit headlines on the press releases, it’s not that far from today’s actual rates.

The recent survey from PC Week and Novarum, a wireless consultancy, shows actual speeds in the order of 400kbps uplink and 1Mbps downlink in U.S. metropolitan areas with well-built 3G coverage (although also with congestion on data services). The figures for smartphones are slightly lower than for PCs, but still above 300kbps for the limiting uplink direction, and more importantly, a usable 3G connection could be obtained more than 90% of the time in many cities. This gives an idea of where we are on the performance continuum: last year was worse (the figures for AT&T jumped by about 50% in just eight months), next year will be better and there will be an appropriate time for every consumer of cellular services to jump aboard the VoIP bandwagon.

Over recent years we saw startups such as Fring, Truphone and Gizmo5 (now acquired by Google) come out with true VoIP-over-cellular-data services. They worked well enough for early-adopters when in 3G coverage, but expectations from this group were probably low. In hindsight, it probably took the recent build-out of 3G/HSPA/EV-DO RevA technology and an increase in the number of base stations to fuel the improvement from experimental to reliable service. The Novarum tests show that there is quite reliable coverage, and the speeds are certainly high enough for a single VoIP call. Delays may present a problem – they certainly used to on cellular data connections in the days of GPRS – and I haven’t seen any figures recently, but informal testing does not show a problem in that regard. (Since voice is an interactive service, delays can be much more damaging than for streaming video, so good YouTube performance doesn’t necessarily predict good voice quality.)

Incidentally, Aruba customers have been using cellular data services as either the primary or backup link from remote APs with good success. Even though the carriers will not guarantee the service, and definitely won’t endorse voice over it, a USB cellular data dongle can backhaul decent amounts of traffic from an AP, with an acceptable level of availability, and the cost of keeping such a link for backup purposes is not enormous. Some of those links carry voice traffic, although it’s not explicitly a VoIP over cellular service, and it appears to work well, interpreting the anecdotes I hear from Aruba SEs.

This will be an intriguing year for cellular data. While the carriers are working so hard to improve their data services, they are also making VoIP over data more reliable and viable. This will put them in a squeeze as they advertise the bandwidth and reliability of their data services, but simultaneously have to caution that they aren’t quite ready for voice. It’s an unenviable dichotomy, and something’s gotta give soon. It’s just a question of when, and every announcement like Verizon’s brings it closer.
Aruba

What's the price differential for voice/data?

Colin from NYC, this column's only fan, poses another penetrating and insightful question:

"Have you seen how the phone companies have been reducing their rates for Voice and increasing their rates for data? Are they saying, "sure you can do voice over our data network! We will not guarantee it and you will pay more!"

In other words, is my premise a house built on sand? Is this column empty pontification? Nothing will come of nothing, speak again?

Cordelia's turn.

Gratuitous Lear quotes aside, it's a good question. And as curious engineers we require figures to reveal the truth. I'm certain that a data bit is a lot cheaper to a user than a voice bit, but let's run a few numbers to see.Taking the Verizon Wireless Web pages at face value, I can find a voice & text plan that gives me 450 minutes for $60 or unlimited minutes for $90/month. We'll take those as baseline, although of course I could go voice-only for a bit less.

Now for data services. I could take these from the same page as a smartphone 'unlimited' add-on data plan for $30/month (I know I couldn't get this plan without the voice plan, but it's an indication of pricing). Or I can look at this page and get an 'unlimited' data plan for $60/month. This is actually capped at 5120MB per month.

These two plans are denominated in minutes and MB respectively, so I have to convert to make a comparison. I'll take the data rate of a VoIP call at 250kbps, and divide that into 5120MB, and if my calculator's right that is around 2730 minutes or 45 hours/month of calling.

So on the one hand $30/month gets me 450 voice minutes and some text messages, while on the other I can talk for 45 hours for the same amount of money. The data bit is a lot cheaper than the voice bit.

Of course you can argue this is not a fair comparison on any number of levels. I can't buy a data plan for my phone without a voice plan... Even if I wanted to do without cellular voice, I might want text messaging... If I want to talk for 1000 minutes/month the calculation is different, etc. And if I use VoIP, I will have to pay the ITSP to complete my calls, so I should add that to the data side of the balance sheet. Pick your own model and run the numbers.

Colin is right that voice pricing is coming down and data is going up (deviously), but I put that down to competition in the voice market (especially from prepaid plans) and a dilemma over not wanting to fall behind in data subscribers, but being in two minds about whether they are helpful when the network is getting congested.

We'll keep watching.

Meanwhile, Colin sends a couple of examples of what he's really asking, rather than the question I chose to answer:

http://www.appleinsider.com/articles/10/01/15/verizon_undercuts_att_reduces_monthly_voice_plan_by_29.html
http://blog.taragana.com/index.php/archive/verizon-wireless-and-att-wireless-pricing-would-you-be-paying-more/

These articles discuss the January's skirmish over pricing, initiated by Sprint but taken up by AT&T Wireless and Verizon Wireless. It reminds one that reading through cellphone pricing plans is very likely a leading cause of U.S. healthcare expenditure and falling workplace productivity... too complicated and not generally worth spending valuable time on. So I will make just a few observations about cellphone pricing.
* The primary competition is still in voice minutes. Text messaging tends to get bundled into the voice plans for all but the cheapest of consumers (yours truly, for instance).
* The trend to compulsory data plans for smartphone users allows the carriers to pull in more money to notionally cover their expenses.

And there's no doubt that the carriers face some difficult decisions. Their spectrum, network, marketing, etc cost $XXX per year, and with a relativley predictable, slow growth in subscribers, they really need that $55/month or whatever average per subscriber. The cynic would suggest that if they can't get it from voice, because of fierce competition, they will look to data - particularly as they can blame data growth for their significant capex over the next few years, and the public is now valuing the services that data plans enable (thanks to the iPhone there for blazing the trail). And I suppose that if one is purchasing a smartphone for $200, even with service, it's easier to tack on a $30/month charge at that point than at any other. I see data plans becoming more expensive, but not because the carriers in any way endorse fancy services over data.

A couple more thoughts to round out the random musing.

To return to the Verizon Wireless smartphone plans, if you trolled into the shop and picked up a Droid or other smartphone, I think (may be reading it wrong) they would want you to sign up for $60/month for voice+text, and another $30/month for unlimited data, for a total of $110/month. That's for 450 minutes/month, an unlimited voice plan it would be $30 more. Compare to an unlimited (capped at 5GB) data plan I could get with a USB dongle for $60/month. Using VoIP and an IM client, I can get the voice and text service out of this as well as data.

And at some stage we will need to debate data pricing. While no friend to incumbent oligopolies, I find it unreasonable to expect any vendor to provide 'all you can eat' service when there is clearly a limit to the supply, and aggregate demand is close to that limit. I'm not sure that I completely trust self-reported figures, but the AT&T suggestion that 3% of their users generate 40% of the data traffic rings true. Most of our economy uses price signals to influence behaviour - when demand exceeds supply, either there's an auction to set a clearing price for the commodity, or the supplier sets a tiered price structure to match costs and benefits (supply & demand) at the margin, one form of congestion charging. In the cellular market today, we lack good feedback on how much data we are using and how much it's costing, but with those or similar mechanisms it should be possible to design a fairly transparent system, perhaps along the lines of smartgrid: there's material for a good many PhD dissertations there.

But it may not be in the service providers' interests to set up such a transparent system, and at bottom the U.S. public does not entirely trust oligopolies as icons of candor, so we will probably just muddle along for a while.

And continued failure in the cellular data market may accelerate the use of Wi-Fi offload, which would be a Good Thing.
New Contributor

Re: Inching towards VoIP over 3G


Colin from NYC, this column's only fan, poses another penetrating and insightful question:

"Have you seen how the phone companies have been reducing their rates for Voice and increasing their rates for data? Are they saying, "sure you can do voice over our data network! We will not guarantee it and you will pay more!"

Gratuitous Lear quotes aside, it's a good question. And as curious engineers we require figures to reveal the truth. For VoIP Service Providers I'm certain that a data bit is a lot cheaper to a user than a voice bit, but let's run a few numbers to see.Taking the Verizon Wireless VoIP Pricing pages at face value, I can find a voice & text plan that gives me 450 minutes for $60 or unlimited minutes for $90/month. We'll take those as baseline, although of course I could go voice-only for a bit less.

These two plans are denominated in minutes and MB respectively, so I have to convert to make a comparison. I'll take the data rate of a Residential VoIP call at 250kbps, and divide that Business VoIP call into 5120MB, and if my calculator's right that is around 2730 minutes or 45 hours/month of calling.

Of course you can argue this is not a fair comparison on any number of levels. I can't buy a data plan for my phone without a voice plan... Even if I wanted to do without cellular voice, I might want text messaging... If I want to talk for 1000 minutes/month the calculation is different, etc. And if I use VoIP, I will have to pay the ITSP to complete my calls, so I should add that to the data side of the balance sheet. Pick your own model and run the numbers.

Colin is right that voice pricing is coming down and data is going up (deviously), but I put that down to competition in the voice market (especially from prepaid plans) and a dilemma over not wanting to fall behind in data subscribers, but being in two minds about whether they are helpful when the network is getting congested.

Meanwhile, Colin sends a couple of examples of what he's really asking, rather than the question I chose to answer:


But it may not be in the service providers' interests to set up such a transparent system, and at bottom the U.S. public does not entirely trust oligopolies as icons of candor, so we will probably just muddle along for a while.

And continued failure in the cellular data market may accelerate the use of Wi-Fi offload, which would be a Good Thing.





We are not far from it being one price for voice and data combined. With VoIP taking off as it is. Prices are going to go down fast.
THe market has quickly gotten saturated with Voip companies so prices will stay down. Heck you can make free calls on gmail right now.
Either way we should be in a good position for costs to be low for voice and data. In my humble opinion. There are some good voip sites. Just google voip reviews and you will get the best ones.
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