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IMS: Assessing Current IMS Business Models

By Mikael Stromquist

IMS Magazine

The Walled Garden

Some operators have created their own “walled garden,” in which the strategy is to deploy IMS as a means to deliver high-demand, differentiated services on their existing network. Ultimately, their goal is to create a self-sustaining universe in which subscribers are allowed in to enjoy all the services and content the operator offers, in a fully secure environment and with an assured user experience and quality of service. By providing new services themselves, these operators can ensure that they will remain the provider of choice to subscribers who desire multimedia content. Further, operators can ensure that the user experience is consistent from application to application, with a uniform user interface, and with the ability to support managed clients and devices.

An additional benefit of the walled garden is the assurance that subscribers won’t ever have to browse for content or services outside the garden, and therefore, all revenue generated goes directly back to the operator. However, at times operators will find that services offered by third parties may provide specialized services, early services, or bring a strong brand that the operator’s subscribers rely on. As a result, some subscribers will leave the walled garden and move on to other providers who offer similar or enhanced, personalized services.

To enable this, some operators have partially opened up their walled gardens by providing subscribers with connectivity to selected third-party content and service providers. But without IMS capability, fixed and mobile operators have no control over their IP networks. Without this control, they run the risk of being reduced to mere bit pipes, unable to assure that their subscribers receive a quality and secure service. Fortunately, IMS gives operators control over their bit pipes and enables them to support a business model that converts the bit pipe to a smart pipe, which is the second model being explored.

It is clear IMS has moved beyond an architecture slide
to a solid approach that will serve as the foundation for network operators migrating to all-IP-based fixed and mobile networks, and an enabler for a dynamic ecosystem of content providers and developers. As operators and the vendor community are working together to examine a host of multimedia applications and revenue-generating services that are viable for subscribers in the near- and long-term, there are three business models taking shape.
The Smart Pipe

Enabled by IMS (news - alert), the smart pipe approach essentially builds an expressway for the operator to support their own services, partner services, and other service providers with a differentiated, QoS-enabled capability, rather than a best effort crowded highway. The smart pipe — characterized by location, presence, security, quality of service, and billing policy and enforcement — enables operators to better deliver targeted advertisement and revenue flow, and this information flow has real value to service providers. Essentially, these value-added services begin to open up a revenue sharing relationship between both network and service providers. For example, because IMS provides multi-device awareness, it also creates seamless mobility for subscribers who are using any device that can move from access A to access B. This opens up a tremendous opportunity to network and service operators, by providing them with the ability to offer bundled services.

Federated IMS

Essentially a combination of the walled garden and smart pipe models, a federated IMS model offers the best of both worlds to network operators and service providers. The strategy of this model is for network operators to offer their subscribers value-added services and content from third-party providers through syndication or a federated IMS function.
IMS will enable network operators to retain
or in some cases increase their revenue while offering their subscribers greater variety and choice.

Through syndication, subscribers stay within the network operator’s walled garden, but they enjoy the freedom to choose content and services from a variety of third-party providers. At the same time, IMS provides service integration across mobile and fixed networks and also ensures that both network and service/content providers get their fair share of subscriber revenue through revenue sharing.

The Optimal IMS Business Model?

Whether a walled garden strategy, the smart pipe, or a federated IMS model, the fact that these three approaches are being considered by mobile and fixed line operators represents a significant change in thinking and philosophies for operators. IMS has allowed for this change to occur. And as it becomes more difficult to hold subscribers inside a walled garden, operators recognize they must adapt their approach and this is where the true value of IMS resides.

IMS will enable network operators to retain or in some cases increase their revenue while offering their subscribers greater variety and choice – and third-party providers will have greater access to subscribers as well as the opportunity to continue creating new services consumers want — and will pay for. The ecosystem enabled by IMS continues to evolve, and undoubtedly additional models will emerge. Ultimately, the industry will gain from the continued advances in IMS, and the consumer will reap the greatest rewards.

Mikael Stromquist is executive vice president, Strategy, for Ericsson North America. For more information, please visit the company online at (quote - news - alerts)

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