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Perhaps Cabral’s accidental finding best epitomizes the current quest for the ultimate “killer app,” a goal that Most history books show that on April 22 of 1500, after a voyage that lasted nearly a couple of months, Portuguese navigator Pedro Álvares Cabral discovered Brazil, opening a gateway to the “New World.” But it was a purely accidental discovery, since the commander was trying to retrace Vasco da Gama’s route to India (discovered earlier in 1497), but in the end sailed so far west of the coast of Africa that he accidentally crossed the Atlantic and instead found Brazilian land.has been relentlessly pursued by service providers for quite some time. Many IMS proponents argue that the technology will enable operators to finally be able to deliver some of those killer apps that they have been seeking for so long. Some of these experts claim that the telecom world is attempting to follow the route to the promised land of “horizontal,” easy-to-deploy, and open standard applications. Previous attempts including the much-glorified AIN (Advanced Intelligent Network) have failed, but the IMS (IP Multimedia Subsystem) (News - Alert)
approach is certainly winning more minds and capturing more attention these days. So will IMS take carriers to the nirvana that AIN promised, but never managed to deliver?
The early indications about the potential of IMS and FMC (Fixed Mobile Convergence) seem to be fairly positive, given the number of new trials by various carriers around the world and the ongoing technological progress being made. Much of this optimism comes from the development of new wireless technologies (3G/WiFi/VoIP) (News - Alert), the launch of high-quality multi-mode devices, and the advent of well-defined convergence technology specifications such as UMA (Unlicensed Mobile Access) and IMS.
As carriers ranging from fixed incumbents and mobile operators to cable companies and VoIP and WiFi providers battle for share of consumer wallets, voice services are becoming more and more commoditized. Therefore, operators have to leverage their core capabilities to benefit from increasing convergence of their products. FMC is a vital component in the strategy of these telecom carriers, as it plays a key role for each service provider type.
An increasing proportion of wireline usage is being lost to wireless operators whenever end-users “cut the cord.” Moreover, the wireline carriers have also been facing a margin squeeze from new VoIP providers, whose low-cost model is enabling them to be more aggressive against the ILECs. Therefore, for the incumbent fixed line carriers, FMC is the perfect mechanism to stop the loss of telephone traffic and revenues to wireless operators and to deliver the best service bundle to their subscribers. In addition, FMC solutions can enhance the uptake of broadband and VoIP applications, thereby lowering the pace of revenue loss and softening margin squeeze.
As they transition to 3G, the mobile carriers have been searching for the simplest and most cost effective way to implement a new breed of value-added multimedia applications. Furthermore, wireless operators are also faced with near-saturation levels in some regions such as Europe, margin erosion from VoIP and the introduction of WiFi as a replacement for some wireless calls. Therefore, the most crucial aspect of their operation is how to increase ARPU with compelling next-gen “killer applications.” IMS can be a great way to deliver these new services, or to help operators to quickly create and identify some of these killer apps that can cater to specific subscriber segments. For mobile operators, the delivery of a full range of multimedia and converged service offering entails a greater capacity and bandwidth than what their networks currently offer. Hence, for many wireless service providers, IMS deployment will be tightly coupled with either EV-DO Rev A or UMTS HSDPA rollouts, only slated to occur during the 2006–2007 timeframe.
Finally, even the new entrants (cable and standalone VoIP operators) will require a few extra capabilities once they reach a more critical mass in order to fight the competitive threat of new bundle offerings from the incumbent carriers. Cost arbitrage alone will not be enough in order for them to win their battle against the wireline service providers, as they will also need to offer more value-added applications to entice new subscribers. The next release of the PacketCable standard (2.0) will have more SIP in the core as well as for end-user devices or clients, and is expected to support enhanced and video telephony services across several platforms. It will also allow for presence and availability, cellular integration, and ENUM/peering.
2005 was a year that perhaps started with inflated expectations about FMC, as IMS was the most-often mentioned buzzword at shows such as
3GSM ( News - Alert), CTIA, and Globalcomm. However, towards the end of the year, there was a flurry of announcements about IMS trials and deployments, and some of the early optimism all of a sudden did not seem that farfetched.
Ericsson ( News - Alert)
(Telefónica, TIM, TDC),
Siemens (News - Alert)
(O2, KPN),
Nokia (News - Alert)
(Saunalahti, Telia Sonera trial) and Lucent (
Cingular (News - Alert),
BellSouth (News - Alert)
grabbed most of the contract announcement headlines.
Lucent’s announcement of its win at Cingular in October of 2005 offers some quick brushstrokes as how IMS could eventually become a “game changing” technology with the potential to shift the competitive landscape in telecom equipment. The vendor’s solution will enable Cingular to offer its 3G network customers an easy-to-use broad range of new and personalized voice, video, data, and multimedia services that they will be able to access anytime, from almost anywhere, with almost any device.
At this year’s 3GSM in Barcelona, Vodafone announced the winners of its IMS RFP — Nokia and Ericsson. This means that if any of Vodafone’s subsidiaries elects to embrace IMS, it will have to pick between Nokia and Ericsson as its IMS supplier. More importantly, this deployment also indicates that mobile operators will consider IMS when evolving their core wireless network infrastructure, for three basic reasons. First, the need for additional bandwidth in order to support next-generation multimedia services, as highlighted before. Second, since IMS represents an overlay infrastructure, it is natural to add it when the core network is changed. Finally, the actual core IMS infrastructure CAPEX (excluding applications) only represents about 20 percent of the overall expenditure necessary to upgrade a wireless network.
However, at this juncture, it is too soon to declare any leaders, as the IMS market is just beginning to unfold. Most industry participants and observers agree that FMC services will take time to develop and are unlikely to gain significant traction until 2007. But given that 2005 was largely the year of the trial and 2006 is shaping up to be the year in which many of the announced wins in ‘05 will start being deployed, the IMS optimism is still prevalent.
IMS is also changing the business model from the traditional large, monolithic, hardware-based infrastructure sale to a more annuity-like, software sales driven model. IMS is far more software intensive than VoIP or other legacy technologies. The ability to rapidly mix a few existing applications in order to create a new “combinational service” is a key ingredient for the future success of most service providers.
So where does that leave the quest for that ultimate new service that will change the landscape of the telecom industry? Perhaps the quest for the “killer app” might not lead to the killer app itself, much like Cabral’s search for the route to India did not lead him there. However, as in the Portuguese explorer’s case, sometimes the best discoveries happen purely by accident. IMS will enable carriers to experiment with different applications and find the right combination for a certain customer segment. And maybe these more focused services that exclusively target parts of their clientele will turn out to be just as appealing as the ultimate killer apps…
Ronald Gruia is Program Leader and Senior Strategic Analyst at Frost & Sullivan covering Emerging Communications Solutions. For more information, please visit www.frost.com. (news - alerts)
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