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For more than a century the telecoms market has been seen as a utility selling a service. However, with the changing demands of 21st century users, operators are increasingly under pressure from their customers to provide an attractive experience, instead pushing new products to market.
As telecom increasingly becomes a more open and competitive market, its end users demand (as with any open market) a balance of affordability, predictable pricing, simplicity, quality, freedom of choice, personalization, and expression. The telecoms market, realizing these demands, is quickly adapting to the rest of the economic environment, mirroring the Fast Moving Consumer Goods (FMCG) market, which has evolved from a Service Economy to an Experience Economy. As such, it has moved from differentiation through offering (packaged) products and services to differentiation based on a total user experience, not subject to quick commoditization due to its ‘subliminal’ nature (e.g., McDonalds, Starbucks, Vodafone Live).
Innovation on Collision Course
While creating and branding an overall experience, the technological innovations are moving on even more rapidly than ever before. The convergence of telecoms and IT has already given birth to myriad new technologies. The so-called ‘Third Wave’ of technology comprises the advent of always-on packet networks together with multimedia technologies such as camera phones, video players, Java, Multimedia Messaging Services (MMS), Wireless Application Protocol (WAP), and IP Multimedia Subsystem (IMS). Most of these technologies have been brought to market as if they were services and subsequently failed to achieve mainstream consumer adoption. Even though, the technology itself offers a new world of opportunity for consumer communications; it tends to move ahead of user requirements and, at times, imagination.
The trend towards an FMCG market for communications and the speed of new technology development are potentially on collision course, as the telecoms industry continues the strategy of pushing technology to a market that is not ready to receive it. Although now one of the fastest growing service enablers, this has happened with the initial introduction of WAP. However, if packaged correctly, Third Wave technologies can definitely meet the requirements of the aimed User Experience economy. To enable critical mass, communication services need to be accessible and comprehendible. Therefore, mirroring human interaction seems to be a critical success factor.
IMS’ Promise to The End User: Mirroring Human Interaction
As human communication consists of only five per cent words, with 35 per cent relating to expression and 60 per cent conveyed by body language, the Third Wave of technology opens
the door to a giant leap in mediating human interaction by means of electronic communication.
The best example in this respect is IMS’ ability to integrate presence in any future service, adding non-verbal components to person-to-person communication services. People will also be able to combine multiple senses within one single session, freely and intuitively combining voice, video, pictures, audio and, in the future, who knows… maybe even smell and taste. This will greatly enhance mobile communications, offering greater productivity through more business interaction and enabling more emotive and intuitive personal communications. From an end user point of view, this is the real promise of IMS.
The Challenge Beyond IMS: Making
Messaging Intuitive
To have end users adopt IMS enabled services of tomorrow, a true customer centric approach that meets the end user’s core interest — communication — is required. This requires a different approach, where end user interaction is directly related to communicating only. The end user should become the starting point for the communications process, while technology is hidden to the background.
To access a communication service, users do not select a technology (SMS, e-mail, etc.) but instead, select a contact from their presence enabled address book. Contact and presence information will help senders to determine what means of communication best fit their needs. Location, availability, and device used by both sender and recipient determine the nature of the communications, including how it is (technically) delivered and presented at each end.
Some fixed operators
are losing as much as
one per cent market
share per month.
Users are able to receive a single, consistent look and feel across messaging services, whether SMS, MMS, voice mail, video mail, Instant Messaging, e-mail, and messaging based on SIP (Session Initiation Protocol). Furthermore, operators, content providers, and device manufacturers are able to create a common look, feel, branding and — where appropriate — functionality of devices (ranging from PC to mobile device to set-top box). This definitely contributes to the creation of a truly intuitive communications experience.
IMS’ Promise to Operators: Assuring Business Control
Operators are facing increasingly severe competition, not only from new market entrants but also from players in other domains. Mobile operators compete with mobile virtual network operators (MVNOs) and wireless local area network (WLAN) providers that offer broadband access through hotspots. Fixed operators are under pressure from Internet service providers (ISPs) and the likes of Skype, who provide free calls based on Voice over Internet Protocol (VoIP), and VNOs that bring down per-minute pricing for voice services. Some fixed operators are losing as much as one per cent market share per month.
Migration to an all-IP network, where IMS is an important first step, will help operators to drive down costs and allow them jostle for position in the marketplace along with the other players — incumbent and new. For example, mobile operators will be able to compete on price with fixed operators and in content provision with many new entrants. By offering converged services they will also be increasingly able to provide a full portfolio of services to engage and retain customers.
The Challenge Beyond IMS: Safeguarding Customer Control
MSN, Yahoo!, and AOL are currently launching branded clients, downloadable for free by any mobile user. As soon as a larger audience will start using these services on a broader scale, mobile operators’ messaging revenues will be under further pressure. This is one of the biggest threats for operators, as this might downgrade their business to a mere ‘bit-pipe’ where other providers actually serve the customers, or enterprises serve their own employees.
However, fighting these global brands and blocking end users’ access to their services is not an option as it is not in line with the end user demand for ‘freedom of choice’ and ‘expression.’ The operator’s best option is to go for an open market model that enables seamless interconnection between the (mobile) operator’s domain and other domains (like other mobile operators, MSN, Yahoo! or Google). As an example, introducing instant messaging clients embedded in handsets and making sure that interoperability is provided with MSN, Yahoo!, and AOL will generate more revenue and customer loyalty for the operator. However, ignoring this market trend will result in subscribers downloading third-party clients that bypass their infrastructure. IMS will make it easier for operators to enter partnerships with players in other domains and jointly create new, innovative and compelling end-user services.
In 2005 MSN and Yahoo! already opened up their domains to one another. And in 2006 global operators, joined in the GSMA, have announced to introduce an Instant Messaging (IM) service across their operator domains. As with SMS, the next logical step will most probably be that different IM domains will all open up, creating true freedom for the end user.
IMS: The Holy Grail?
The main benefit of IMS is in the provision of converged person-to-person or group multimedia services on the converged packet domain. Multiple services can be delivered within a single session, for instance, voice can be combined with document sharing and streaming video. IMS also enables multiple simultaneous synchronized sessions, such as instant gaming, push-to-video, or instant messaging (IM). IMS provides more freedom for people to choose what, where, and how to communicate.
IMS is a standardized architecture that enables person-to-person communication services in an all-IP environment with the quality, reach, and chargeability that people are familiar with. It supports many user experience-centric service enhancements such as multiparty and multimedia collaboration for sharing and communicating content between a group of friends or colleagues.
Target Markets & Timing
Fixed operators and ISPs will be the first to implement IMS or pre-standard IMS-like solutions. This group faces the biggest pressure and has fewer means to counter the competition because they traditionally have fewer value-added services on offer and very often no service creation environments at their disposal. IMS will allow them to introduce VoIP, which will support significant cost reduction.
For mobile operators the situation is less immediate, but the opportunities are equally expansive. Mobile operators have a lot of value-added services within their portfolio and have more sophisticated solutions for controlling user access and to charge for content and services at different levels. Potentially, IMS offers these operators extensive cost reductions and faster time-to-market for new services. However, as long as they cannot replace their current circuit switched voice service by VoIP, the business case is less clear.
Beyond theory…
IMS enables a bridge to be established between Internet-based services (chat, e-mail, IM, multimedia file exchange) and traditional operator services (SMS, MMS, voice). It enables operators to provide an experience above and beyond today’s location-to-location communications, whether fixed or mobile. It answers the needs and can exceed the expectations of many in today’s FMCG environment. Being aware of what those needs are and how they are changing will enable operators to remain innovative and at the forefront of the market, without overstepping the mark and launching new technologies onto an unwitting audience.
So, instead of continuing to search for the elusive killer applications that IMS could enable, the highest potential for return is based on the evolution of services that already exist in the comfort zone of today’s majority of end users: i.e., voice and messaging. Therefore, operators can gain a greater return from enhancements and combinations of applications that users are already familiar with.
Even though IMS offers the right starting points for operators to deal with the inevitable consequences
of convergence, creating the required return on investments remains a major challenge. Especially since, all users today, have not yet adopted IMS-based technology. Operators should therefore have a
strategy in place to migrate their customer base towards IMS technology.
Service would do well to consider a vision based on the following steps:
• Implement an IMS framework next to the existing service portfolio, still (largely) based on circuit switched technology.
• Enable seamless inter-working between old (circuit switched) and new (IP-based) worlds, as this is a pre-requisite for end users to adopt any new technology.
• Assure that IMS subscribers will start contribute to cost savings for the start by routing their traffic most efficiently through the network (i.e., avoiding expensive SS7 technology whenever possible).
• Start migrating customer base towards IMS enabled services by introducing new services (such as Push-to-Talk over Cellular, Instant Messaging, and video sharing) and traditional services (voice and messaging) based on IMS/SIP with a unified and branded
user experience.
Save yet more OPEX costs by downgrading circuit switched technology as soon as SS7-based traffic decreases.
IMS is definitely the future for telecoms providers, enabling them to provide enhanced experience and offerings for users to compete in a changing and challenging marketplace. A successful deployment however depends on the right migration strategy and the architectural choices that enable this strategy.
Martijn Brouns is product marketing manager — Intuitive Messaging — at LogicaCMG (news - alert). For more information, please visit the company online at www.logicacmg.com.
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