France Telecom Seeks New Competitive Edge from High-Definition Calls

France Telecom says that its Spanish unit, Orange Spain, will offer HD voice calls on its mobile network in the Barcelona area during the GSMA Mobile World Congress, which will take place in the city on 15–18 February. The operator will deliver the service together with Ericsson, which supplies the needed radio access and core network technology.

Outlook and Implications

• "Sorry, But Did You Just Say Fifty or Fifteen?": In marketing speak, HD calls are said to give callers the same experience as they were conversing in the same room. The trick is in propping each call with extra bandwidth, which then allows both the high- and low-end voices to be delivered in full—in comparison, a non-HD call basically "cuts" these corners of the voice spectrum, making it harder for the listener to distinguish similar words and sounds. Technically speaking the quality of HD still fall well short of face-to-face exchanges, but the differences are often so little that the human ear can barely notice them. This, by turn, particularly helps people with speech problems and accents, and in general can improve the calls involving strangers who are unfamiliar to each other's speech patterns. To benefit from the capability, the users needs to have HD-compatible handsets, although there should be notable improvement also when there is only one such device in the call. Since from the subscriber viewpoint the better voice quality essentially reduces the stress and productivity losses related to misunderstandings, HD-level calling may well have its greatest potential among business users—and especially the ones in long-distance relationships.
• France Telecom Seeks New Edge in HD Calls: France Telecom has live-trialled HD mobile calls most of all through its start-up arm in Moldova, where it has been able to build out HD-enabled network equipment as a greenfield deployment (see Moldova: 11 September 2009: Orange Pioneers AMR-WB Improved Voice Quality in Moldova). The next in the list the company's U.K. business, which is currently testing the service, with an intention to put it into commercial use later in 2010 (see United Kingdom: 31 December 2009: Orange UK to Start HD Calls During 2010). The showcase at the Mobile World Congress is further indicative of how the French telecoms group appears to be quite willing to become the frontrunner in promoting HD voice, and we expect the company to announce further upgrades in other markets in the course of this year. From the operator perspective, the biggest catch is in the scope for service differentiation—the context being that when all providers are capable of providing calls in more or less the same, rather limited quality, the only major competitive front is obviously the price of their offerings. By allowing high-def phone calls, France Telecom is trying to add new depth to the product and thus possibly budge the ongoing price erosion. At the moment, the availability of HD handsets is still very limited, but this understandably changes over the medium term, as the vendors respond to the growing demand. Going forward, besides the actual HD upgrades, the extra bandwidth of the calls is likely to also require new investments in backhaul infrastructure, to prevent the networks from being clogged.