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Aug/Sept 2008 | Volume 3/Number 4
Featured Articles

Business Models for IMS

By Richard "Zippy" Grigonis
Both business and architectural models tend to reflect a network operator’s greatest expertise. Thus, a mobile operator would use the multi-device awareness and seamless mobility capabilities of IMS to combine wireless voice, SMS, mobile multimedia and broadband to offer an "all-mobile experience", for a flat fee. A triple-play cable operator would combine bundled services with mobile service to offer "the connected home and office". Traditional telcos would create a comfortable, simple, "walled garden", within which IMS is deployed on their network to create a secure, stable, high-QoS environment populated with differentiated, churn-busting services. Over time, however, one would expect that network operators, in their effort to find and bundle more services than they could develop themselves, will evolve into a more complex, federated IMS model. This involves more intimate, peered connections to service providers so that as many new and exciting third-party content and services as possible can be offered to subscribers. In this world, IMS continues to organize any and all applications running in next-generation networks. IMS thus enables highlyintegrated service ecosystems, providing users with services they want that would otherwise be too complex or expensive to build using vertical, "silo" solutions.

As Mikael Stromquist (EVP, Strategy, for Ericsson North America) has said, "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 changes wrought by the IMS universal services architecture affect the content delivery models, which in turn influence the high-level business models. Capex and Opex savings may drive IMS deployment in the short term.

Although IMS was first formulated as a tool for mobile operators, the fixed operators initially took the lead. Indeed, mobile services can even be bundled with IMS-friendly services without IMS actually being used for the mobile component.

For example, Movial Corporation has a solution and service offering for rapid creation of Linux-based mobile devices. Called Movial Communicator, it’s an applications suite enabling device manufacturers and service providers to rapidly launch revenue-generating, converged services such as presence, instant messaging, Push-to-Video, VoIP, and video telephony. The services based on Movial’s products across PC, Mobile and other device platforms are meant to increase service usage.

Recently Movial announced that Optimus, a major mobile operator in Portugal (Mobile Carrier of Sonaecom and partner of Orange group) has launched a new mass market IP Communication PC service, powered by Movial Communicator. With Movial’s PC client software, Communicator, Optimus extends its services to PC users for the first time, increasing its subscriber base and offering its more than 2.8 million existing subscribers an additional and exciting channel for rich, multimedia communication. With its compelling and fully integrated end-user experience that includes IM, SMS, MMS, email, VoIP, video telephony, voice and video mail, all based on Presence, Movial Communicator enables Optimus to quickly launch its PC service and is the first new service to sport Optimus’ new branding.

As Movial’s CEO, Jari Ala-Ruona , says, "Optimus is a Portuguese mobile customer, and they launched our PC Movial Communicator and they bundled that PC application with the regular mobile subscription, which is a flat fee of about 10 Euros. The flat price covers all mobile calls within the community served by this customer. Additionally, you have prepaid and prepaid mobile calls when they are within the customer’s number space. They’re launching an aggressive campaign where subscribers get a simcard subscription and in addition would have a PC application and in terms of mobile there would be no IMS services. The IMS service is for what you can do with the PC. It’s a unified user experience that includes voice and video services, text messaging, multimedia messaging, CAS capability, voicemail and presence capability. It’s access agnostic so that although you get a mobile subscription for your mobile phone, the mobile operator can offer a service on the PC and they’re not even trying to bundle that so that you don’t have to exclusively use this from our mobile network or our ADSL fixed broadband connection. It’s totally access-agnostic. So you can use it anywhere you have a PC connection to the network."

"What’s neat about this is that young people who hang out on different kinds of social sites tend to use PCs for their media consumption, rather than the TV," says Ala-Ruona. "What you can do with our piece of software is press a button and all of your mobile calls will be transferred via your PC. If you’re travelling, you don’t need to worry about roaming charges. It’s very convenient for the end user. The business model, as I’ve said, is a simple monthly fee and that includes all communications within the operator’s numbering space. And if you’re calling somebody who has not subscribed to this service, then you pay conventional mobile phone per minute rates. Likewise for SMS messages, which are charged per message to those outside of the service."

"This launch has been interesting not just for the operator but for us as well, since it showcases how IMS has actually ‘crossed the chasm’," says Ala-Ruona. "It’s really mainstream now. It’s bundled in the mainstream application layer and there’s a huge marketing campaign behind it. The whole introduction of a low flat-fee by the mobile operators changes things, as does multiple forms of access to the network, and what’s even more proliferating is the fact that the services aren’t tied to the mobile phone any more. You just get one bill, which lists your PC and mobile calls. You don’t have to worry about how you get charged by using a PC application on the network. It’s all about simplicity."

Arun Bhikshesvaran, Vice President & General Manager of Strategy & Market Development within the North American Market Unit of Ericsson, Inc., recently wrote on, "Blended multimedia and communications services are starting to happen, and so is the journey to IN and circuitswitched network modernization. Perhaps an even more significant advancement will be when network operators turn their own service and application offerings into one of several service domains that will become available in managed, efficient and controlled ways over their networks. In other words, for network operators and the IT, media and communications industry to drive a win-win service delivery interface and business model that allows for free-flowing collaboration between applications and services innovation, as well as professional and user-friendly service delivery and device management… This scenario would benefit end users and attract addressable revenues from advertising and transaction into the wrestling ground. Some traction is already being made outside of the U.S., where mobile operators have opened up to Internet brands and integrated the Internet portal with mobile services."

Many network operators have approached IMS at a leisurely pace, as they review the benefits (or disadvantages) of IMS interms of cost savings, new revenue streams, enhanced capabilities and service provisioning. In today’s economic climate, revamping a network architecture to one of IMS compliance involves justifying large long-term investments and deciding which service delivery platforms to adopt and which IMS elements to deploy first.

Before everything is said and done, we’ll probably see novel IMS business models spring up and transform both network operators and their service provider partners.

Richard Grigonis is Executive Editor of TMC’s IP Communications Group.

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