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Summary

Vodacom South Africa and Viva Kuwait have launched the first VoLTE services in the Middle East and Africa. In the short term, their main aim in launching VoLTE early is to differentiate their services from those of competitors. But in the longer term, VoLTE offers operators in the region, as elsewhere, an opportunity to develop new voice-based services and counter the offerings from OTT players.

MEA’s first VoLTE providers are aiming to differentiate their services

Both the Middle East and Africa have seen the launch of their first commercial VoLTE services recently, with Vodacom South Africa having unveiled its VoLTE offering in April and with Viva Kuwait having introduced VoLTE earlier this month.

These moves come fairly early in the global deployment of VoLTE: Fewer than 20 operators worldwide had launched VoLTE as of the end of 1Q15, according to research by Ovum. And most of those services were in North America or advanced Asia-Pacific markets such as South Korea, Japan, and Hong Kong.

So why have Vodacom and Viva decided to launch VoLTE now, and how are they pitching it to customers? Vodacom SA’s VoLTE service is initially available only to contract customers who have the new Samsung Galaxy S6 and S6 Edge handsets – and Vodacom said that it had held off introducing the VoLTE service until these VoLTE-compatible devices were available.

Vodacom said that VoLTE users would experience faster call-setup times, better voice quality, and additional features such as the ability to browse the web or use apps while making a call. Vodacom also said that the launch of VoLTE represents a progression from its earlier launch of enhanced voice services, which comprised HD voice and other techniques to improve call quality. With VoLTE, Vodacom will also be able to offer video calling and media sharing, it said.

Vodacom is not charging a premium for the VoLTE service; rather, VoLTE calls are charged as per the customer’s existing calling rate.

In Kuwait, Viva is promoting VoLTE under the slogan of “Surf and talk at the same time,” and it is telling customers that the advantages of VoLTE are that it will allow them to use the Internet at the same time as making a call, and that VoLTE offers an improved calling experience, including high-quality “HD-like” calls and video calls.

The strategies of Vodacom and Viva regarding VoLTE are in line with a global trend, whereby operators that offer VoLTE are generally not seeking to “monetize” the service directly, for example by charging a premium for VoLTE calls, but are instead pricing VoLTE at the same rates as regular voice calls. (Though some operators, such as CSL in Hong Kong, are charging a premium for VoLTE video calls.)

Rather than seeking to monetize VoLTE, operators that offer VoLTE are typically doing so as a means of improving and differentiating their services, in order to win and retain customers – and again, the strategies of Vodacom and Viva are in line with this broad trend too, though they also reflect the specific circumstances of the two operators.

For Vodacom, as the biggest mobile operator in South Africa, being the first in the country to launch VoLTE is a move that is designed to show that it is the leader, and the most technologically advanced service provider, in the South African market. Vodacom was also the first operator to launch LTE in South Africa.

Viva, as the third entrant in the three-player Kuwaiti mobile market, has most likely decided to be first to launch VoLTE in Kuwait because it is the challenger, and as such it aims to disrupt the market and encourage customers to move from the other providers, not just though price competition but also by offering eye-catching new applications and services – such as, in this case, VoLTE.

Also, of course, the South African market, and Gulf markets such as Kuwait, are among the most advanced in the Middle East and Africa, so can be expected to be in the forefront of technological developments in the region.

And, more broadly, VoLTE offers operators an opportunity to develop new voice-based services that might help them maintain voice revenues and compete with OTT communications services, which often threaten operators’ core voice and messaging services.

As some of the factors that have held back VoLTE – such as a lack of VoLTE-compatible handsets and problems with interoperability and roaming – are addressed, more VoLTE launches in the region can be expected before long.

In fact, some other operators in the region – such as Du of the UAE and Zain Kuwait – have already publicized VoLTE tests, and Du has said that it plans to introduce VoLTE by the end of 2015.

Appendix

Further reading

“VoLTE: Bringing Voice Back Into the Spotlight,” TE0009-001414 (16 April 2015)

VoLTE Service Launch Tracker: 1Q15, TE0009-001417 (27 April 2015)

Author

Matthew Reed, Practice Leader, Middle East and Africa

matthew.reed@ovum.com

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