Market Insight

AT&T and Verizon move closer to full 4G voice interoperability

November 07, 2014  | Subscribers Only

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AT&T and Verizon have signed the first US agreement to enable VoLTE-to-VoLTE calls between the two networks. The voice over LTE (VoLTE) service will launch in 2015 with engineers from both operators working together to enable interoperability.  Mobile customers will not be charged a premium to make VoLTE calls on these 4G networks. The new service will enable:

  • VoLTE HD Voice calls, with a slightly superior ‘high definition’ audio quality.
  • VoLTE calls to be made from an AT&T handset to a Verizon handset, and vice versa, with all of the features of VoLTE.
  • A foundation for Rich Communications Service (RCS) which includes operators’ response to over-the-top (OTT) messaging services such as WhatsApp or iMessage. 

Our Analysis:

With a combined market share of over 70%, AT&T and Verizon are by far the largest mobile operators in the US. AT&T and Verizon operate the two most expansive LTE networks; AT&T reports around 95% population coverage (300 million people) and Verizon achieved a nationwide LTE network in 2013.

The interoperability foundation will also support RCS services that will be able to provide better voice and video calling and messaging experiences. Operators intend to use this capability to launch communication services to challenge the established IP-based services from companies such as Apple (FaceTime), Google (Hangouts), Microsoft (Skype) and Facebook (WhatsApp) but IHS believes operators have left it very late to respond.

These attempts will likely be a case of too little, too late from the operators, unless operators can execute their launches perfectly. Existing OTT services are free to use, so operators cannot undercut their price, have been around for years, and have become entrenched in current consumer usage habits.

The shift of voice traffic to the LTE network allows operators to dedicate more spectrum resources to 4G/LTE rather than legacy 2G and 3G services. AT&T or Verizon are unlikely to shut off their legacy networks fully, because of the need to continue to support M2M and roaming. Instead we expect the operators to allocate a larger proportion of the spectrum resources to 4G LTE and LTE-Advanced network standards. In order to shift resources away from older services, a significant portion, if not all, of the subscription base will have to use compatible devices, which currently are only high-end devices. But the price erosion of 4G handsets is already opening opportunities for operators to increase adoption.

The quality of voice connections will improve for both parties, but it must be clearly better for consumers to alter their attitude and usage of operator services. Aside from a small voice quality improvement, transferring voice services over LTE networks will mean that Verizon LTE subscribers will be able to use a simultaneous data and voice connection, which was not possible over its 3G network. This improved data experience on Verizon will be the most significant consumer benefit from the VoLTE launches.


AT&T Verizon Wireless
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