The transition to VoLTE has been coming for Verizon customers for some time, and it sounds as though next year will be the turning point. Fran Shammo, CFO of Verizon, said during the “Oppenheimer Technology, Internet and Communications Conference” that big red would have their first VoLTE capable handset later this year. He went on to note that 2014 is the year they’ll turn the service on, with dedicated VoLTE devices coming towards the end of 2014.
As for the sale of a VoLTE device this year, that’s expected to be a precursor to future devices, and allow customers to transition into VoLTE easily (should they remain on contract). Those devices will still have CDMA chips in them, because VoLTE won’t be robust enough to handle all calls, and calls will need to be transferred between LTE and 2G/3G.
This leads to a few interesting questions, notably what will happen with data plan pricing. As Verizon transitions into a full LTE network, their legacy technology will be updated. Once this transition is complete, those traditional channels for making calls will no longer be viable, and we’ll be entirely reliant on data.
VoLTE promises better call quality, but it could also represent another avenue for carriers to continue their drain on your bank accounts.
Second, what will happen to those on legacy unlimited plans? Those plans are structured to offer data as well as 2G/3G connectivity. If devices are not sold to take advantage of those services, or that functionality goes away, you can expect that your days of unlimited data via Verizon are coming to an end. Shammo has hinted at such a change previously, so the groundwork may be laid.
In the chat, a few interesting tidbits came out regarding the handsets Verizon will carry. As a VoLTE device does not operate on a 2G/3G network, the need for CDMA differentiation goes away. While VoLTE devices are necessary, any VoLTE capable device will work on Verizon’s network. When asked to discuss how the cost of handsets could be affected, Shammo had the following to offer:
I look at this about three to four years out. Subsidies will eventually come down, because as the technology and the manufacturing efficiency of this technology... so, it is naturally going to come down over time, especially with the increase in competition. As you get to the end of 2014, we will have our first LTE-only handset. When that happens, I then take the CDMa chip out of the handset, and my subsidy will decrease.
Important to note is that Shammo didn’t make the distinction to whether he was speaking as a consumer, or the CFO of Verizon. “His” subsidy will decrease, but it’s not clear if he meant for everyone, or just Verizon.
VoLTE promises better call quality, but it could also represent another avenue for carriers to continue their drain on your bank accounts. If their subsidy is reduced, but our liability remains the same, they’ve increased profitability. If they effectively kill off unlimited data, but have handsets reliant on such a network, we’re ultimately at their mercy.
Time will tell what all comes of this, because we still have quite a bit of time before VoLTE matures completely, but we’re wise to keep an eye on how it develops.