5G Developments and Voice Assistants to Drive Mobile Voice Growth

February 2021

Telecoms & Connectivity

Sam Barker

VP of Telecoms Market Research

The mobile voice market has always been particularly prone to, and driven by, technological disruption and innovation.

Over the past ten years, however, the mobile voice services landscape has been profoundly affected by several ground-breaking advances in technology. These include the penetration of AI and machine learning in communication services, the rise of highly customised OTT (Over-the-Top) mobile voice and messaging applications, and the roll-out of superior connectivity modes, such as 4G LTE and 5G, etc.

Mobile channels are becoming increasingly important for brands and enterprises to connect with customers, with service providers emerging that look to offer a comprehensive platform that enables the management of this communication. These are CPaaS (Communications Platform-as-a-Service) platforms and include SMS, RCS (Rich Communication Services) and OTT messaging applications, as well as push notification, email and voice services.

The value of the individual services CPaaS offers is quite low, however by bundling them together, CPaaS creates a technology that is far better value than the sum of its parts. Indeed, we believe that the key to success for CPaaS platforms should not be measured by traffic, but rather, by the number of communication platforms it can offer, and the introduction of chatbots, financial services, payment services and expansion into other sectors will be key for CPaaS providers maximising their revenue.

Furthermore, 5G will have a disruptive impact on the telecommunications space, meaning that operators must look to new business models and monetisation strategies to maximise their return on investment. Operators will not only provide connectivity to consumers and enterprise mobile users, but will enable a wide range of applications, both data intensive and moderate. The growing trend of owning multiple devices per user or per household will reshape the way that connections are provided and charged, while high data usage makes old pricing plans questionable.

As operators’ OPEX (Operational Expenditure) continues to rise, they are increasingly turning to network sharing agreements to reduce the TCO (Total Cost of Ownership). 5G is likely to accelerate this trend, as extra costs and rising customer expectations make it difficult for an individual company to match clients’ needs.
The next stage in the evolution of 5G is the development and roll-out of standalone 5G networking architecture. Indeed, standards for this architecture will bring a large number of benefits to operators, including wide network coverage, migration from vEPC (Virtual Evolved Packet Core) to 5G Cores and the evolution of VoNR (Voice over New Radios) and ViNV (Video over New Radio).

Another important trend in the mobile voice market is voice assistants. Indeed, voice-enabled user interfaces are ready for mainstream adoption. Based on the widespread usage of consumer-facing tools, the rivalry between platform owners is intensifying, as more companies combine their VA (Voice Assistant) software with multimodal or hands-free hardware. The value chain for voice assistants is rapidly expanding to include more and more players. Device OEMs (from smartphones, speakers, and wearables to cars and fridges), system integrators, apps developers and cloud providers are all escalating efforts to provide personalised voice solutions for near-natural interactions between users and their electronic devices.

Despite making up less than 10% of CPaaS revenue, we believe that voice services comprise a significant aspect of the overall CPaaS offering.