This article originally appeared in the Jan. 2011 issue of NGN Magazine.

Interconnect providers occupy a unique position in the service flow between service providers since all interconnect traffic passes through them.

However, they traditionally have played the role of middlemen in telecom networks, providing functions that are necessary for the interworking of voice and data service flows between service providers that own the end user relationships. The interworking functions were, for the most part, based on SS7/C7 and IP protocols.

The migration of service provider networks to a flat all-IP architecture, and the gradual replacement of SS7/C7 with IP-based IMS for interworking, have created an opportunity for new sources of revenue for interconnect providers. To take advantage of this opportunity, interconnect providers will have to enable their network with IMS functionality.

Why IMS?

IMS has the potential to be a profitable game changer for the telecom industry, although much of this potential has not yet been realized. The list of benefits originally identified for IMS included reduced time to market for new services, lower cost for introducing new services, access independence, standardized billing for all services, and the ability to create customized blended services using two or more IMS services.

In recent times, the ability to enable service interoperability and interworking between service providers has emerged as another key benefit of IMS. As an example, the IMS RCS service offers full interoperability and interworking of services across service provider networks, unlike proprietary over-the-top services that offer similar functionality in a proprietary service environment. Interconnect providers are directly involved in this enablement.

Interconnect providers can take this concept one step further and utilize IMS to enable new business models that translate into new revenue streams. Interconnect providers can deploy IMS as a hosted solution and offer a wide range of services to the fixed and mobile networks that are connected to them. They can offer IMS services to multiple service provider networks using a mobile virtual network operator model, and/or host third-party services within the service layer.

IMS Interconnect Services

Although several service providers have deployed or are planning to employ IMS services in the next few years, nearly twice as many have reported that they are interested in offering those services but are reluctant to do so, citing the combination of significant capex/opex costs combined with the complexity of deployment, as key factors driving their decision.

A typical IMS solution requires more than 12 network elements and upwards of 22 distinct interfaces. For many service providers that are reluctant to undertake an IMS deployment, the initial volume of subscribers is not enough to justify an expensive and complex IMS deployment. In this scenario, interconnect providers can fill the void and enable a new source of revenue by providing a hosted solution based on the MVNO model.

When providing IMS as a hosted service, the interconnect provider – not the service provider – takes on the financial burden of deploying a complete IMS solution in its network. Service providers then buy IMS services from the interconnect provider and, in turn, offer custom-branded IMS services to their subscribers. Examples include RCS services, full duplex video telephony, video/image/file sharing, messaging, multimedia conferencing, voice over IP, and IPTV (News - Alert). By enrolling multiple service providers in its IMS service, the interconnect provider maximizes its deployed IMS infrastructure and accelerates its return on investment. In addition, because the interconnect provider is the hub connecting different IMS service providers, it has a built-in opportunity to provide value-added applications that are not deployed in the service provider network. 

Hosted IMS solutions present a win-win scenario for all organizations involved. The service provider avoids the time and expense of deploying a full-fledged IMS solution in its network and can simply buy the required IMS capacity and services instead. The interconnect provider not only gains an opportunity to add a lucrative new revenue source to its existing business but also enhances its value proposition in the service provider ecosystem. No longer is the interconnect provider viewed as offering a commodity, or simply dumb pipes.

Business Models for Interconnect IMS Service

There are three business models for an interconnect IMS service.

One is VNO/MVNO. Service providers that have not deployed IMS effectively operate as an IMS virtual network operator, VNO, by signing up with an interconnect provider for IMS service. A VNO is a network that delivers IMS services to its subscribers without owning the physical IMS infrastructure. It replaces this infrastructure, which is expensive to deploy and operate, with a business arrangement in which the interconnect provider buys IMS services and resells them to its customers. The VNO typically adds value by branding the service, setting up distribution channels, and offering customer care.

Another approach to this is the hybrid model. A service provider without IMS can initiate IMS service to a service provider that has deployed IMS. In this case, service provider 1 utilizes the IMS solution in the interconnect provider’s network with the standard NNI interface to establish sessions and interact with service provider 2’s IMS infrastructure. 

A third model is enterprise services. In this scenario the interconnect provider offers IMS services directly to enterprises. By signing up with the interconnect provider for various IMS services, enterprises avail themselves of the rich functionality provided by IMS without deploying a complete IMS infrastructure in their corporate networks. 

Mehdi Ghasem is vice president of strategy and business development and Mohan Palat is principal solutions marketing manager with Sonus Networks (News - Alert) (www.sonusnetworks.com).