IMS Leaps into 2007

by W. Stuart Jones   

2006 has been quite a year for the telecoms industry: not only did the usual suspects in thThe hype around IMS hit fever pitch in 2006 with promises of radically reduced OPEX (News - Alert) and increased revenue from new and enhanced services. But cutting through the hype, what has actually been delivered and what can we expect in 2007?e vendor and operator communities launch a plethora of global initiatives designed to spur development of next-generation mobile applications, but even the Internet players, like Yahoo! got in on the action, launching a dual-mode cordless phone that combines lower cost VoIP with traditional landline / PSTN calling.

But, more than this, reflecting on 2006 I’d argue the biggest development has to be the seismic shift in mindset around the migration to IP-based networks, now regarded as “no longer evolutionary” by Denis McCauley, director of Global Technology Research at the Economist Intelligence Unit, commenting on the Unit’s survey of 395 global senior executives entitled, Convergence (News - Alert) Takes Hold in Enterprise (November 2006).

This shift comes hot on the heels of communication service providers (CSPs) starting to realize that the deployment of stovepipe IP Multimedia Subsystem (News - Alert) (IMS) solutions, the sort offered from traditional hardware vendors, does little to set them on the path to a true IMS architecture. While these point solutions provide an adequate solution to a specific problem, they ultimately lead to an unmanageable network architecture — the exact opposite of what IMS is about — and this realization, if costly for some, has started to become clear.


Interestingly, 2006 also saw an increasing number of CSPs storing user profiles in a central location, leveraging the serviced-based architecture inherent in IMS to move to combinational services, such as instant messaging and multi-voice packages, as found by the Logan Orviss International telecom consultancy (October 2006).

The Early Adopters of IMS
While the market data indicates IMS is here to stay, it is the fixed-line and cable operators who have clearly been the earliest and most aggressive adopters in 2006. For these guys IMS represents much more of an opportunity for them to create new revenue streams and encroach on the territory traditionally occupied by their wireless friends, through the provision of WiMAX, WLAN and other UMA offerings.

If we look at their wireless providers, deploying a full IMS architecture does not necessarily give them a justifiable return on investment (ROI) as many of the proposed services can be realized in other ways. Without the mythical “killer application” the business case for deploying IMS is not easy to prove, as was found in a survey of global operators wherein 54% claimed that proving ROI is a major barrier in its implementation (IP Independence, Loudhouse Research, February 2006). But those that maintain this approach for 2007 are set to be outrun by the fixed-line and cable operators who are doing everything they can to be the “one stop shop” for the customer.

Challenges Ahead in 2007
By far one of the biggest challenges for any CSP (News - Alert) wishing to deploy IMS has to be establishing a watertight business case, avoiding reliance on the hype, and there is a lot of hype out there. The next step is then to select an IMS architecture that will readily and cost-effectively scale as service take-up increases, and is flexible enough to enable rapid introduction of new services without major investment. Without the utopian application that appeals to everyone, CSPs have to support a wide range of services that cater to diversity of need across their entire subscriber base — getting this right is critical.

The explosion in these services leads nicely into the wider issue of standards, which at present focuses on the subscriber and less so on group-based services, such as buddy lists and shared subscriptions. As reported by Logan Orviss International, October 2006, CSPs must be savvy to implement the extra and enhanced services in an efficient manner and by placing the subscriber data in a central location, leveraging the serviced-based architecture in IMS, to ensure the benefits can be truly realized.

Network architecture aside, having the right people with the right skills is also another challenge CSPs will face in 2007. If we are to believe The Economist Intelligence Unit report, 50 percent of companies lack in-house skills and experience in IP convergence technologies, which if not addressed by the industry as a whole will surely impede the “no longer evolutionary” migration to IMS.

However, migration to an IMS architecture rests on the number of “true IMS” mobile handsets that will be ready when the technology comes to market. Disruptive Analysis forecasts that IMS handset functionality will only reach 20% of the market in 2009, and even then it will be of limited use because of the shortage. But, this IMS “chicken-and-egg” debate could rage on if not addressed in the wider context of the growing trend towards fixed-mobile convergence (FMC).

The IMS in FMC
With 70% of global senior executives viewing convergence as a driver for improved customer experience (The Economist Intelligence Unit, November 2006), which ultimately decreases churn, IMS’s role in this could prove the jewel in the crown to help build the solid business case.

Proof comes from ABI Research (News - Alert) which predicts that operators will spend $450 million during the next five years to create FMC-enabled networks. If that seems a lot, the payoff is much, much bigger: ABI predicts that in 2011, operators will generate $97 billion in revenues from FMC services. And IMS is the missing unifying block between the fixed and mobile world, creating a mechanism whereby providers can provide common services to their subscribers, independent of how subscribers choose to access the services.

The Future of IMS
Fixed-line operators who decide not to migrate to an IMS architecture are set to lose an opportunity to develop new revenue streams and encroach on the ‘walled garden’ of the wireless world. Those in the mobile camp that opt out of IMS are bound to propagate increasingly complex networks as they attempt to defend their market positions by deploying “plug-and-play” services on existing architectures.

Everything considered, IMS is here — without it, the fixed or wireless providers will struggle to compete against the new entrants providing converged services, the likes of Skype, Google (News - Alert), ISPs and the multitude of broadcasters. Operators would be foolish to compromise on the IMS architecture they deploy — a centralized data architecture is vital to support future FMC services. With a good IMS architecture in place, this will provide flexibility, which will prove to be the vital weapon to win the FMC race.

W. Stuart Jones is General Manager and Vice President, Americas, of Apertio. For more information, visit the company online at www.apertio.com.