TMCnet
ITEXPO begins in:   New Coverage :  Asterisk  |  Fax Software  |  SIP Phones  |  Small Cells
 



AT&T/BellSouth/Cingular Mega-Merger Is All About IMS

News Analysis By Robert Liu
TMCnet Wireless and Technology Columnist


 

The importance of the IP Multimedia Subsystem (IMS) architecture has never been more abundantly clear than when AT&T recently disclosed its mega-merger plans to combine forces with BellSouth and Cingular Wireless. Many analysts, in fact, think the prime motivator for the $67 billion deal was the promise of convergence (i.e., wireless bundling, integrated offerings, etc.) as opposed to the billions of dollars in potential savings that could be squeezed out in operating efficiencies.


The reason that this deal was done and done now was Cingular. Cost effectiveness is a big benefit, but the main reason is Cingular. Its to create a vision for the customer, said Jeff Kagan, noted telecom analyst.

And those sentiments were echoed even in the executive suites of AT&T (news -alerts) and BellSouth (news -alerts) right on up to the front office, as evidenced by the March 6 conference call following the news.

I believe when you look at our industrys development and at our industrys future, the merger weve announced is a very logical next step, declared AT&T Chairman and CEO Ed Whitacre. It will improve our growth profile with increased exposure to wireless. It will create a strong national and global competitor better positioned to innovate and deliver new services to both businesses and consumers. It will give us a single unified ownership of Cingular Wireless with the industrys best combined wireless and wireline reach. And these factors will put us in a position to speed development of next-generation services that integrate wireless and wireline.

The appeal of IMS, a series of specifications outlined by the 3GPP cellular governing body, stems from the fact that, for the first time, the IT world can play under the same rules of the so-called Walled Garden model of the cellular realm by using a new common session control layer to control IP-based applications and services.

This merger will help us accelerate technology evolution. Were on a migration path to converge to IP-based services. Thats true in both consumer and business markets. And its a migration that encompasses both wireline and wireless, explained Randall Stephenson, COO, AT&T. We think there is significant opportunities in converged services, which allows customers to access content and applications across any of their three screens: wireless, CT or TV. This merger paves the way for faster progress in this key area.

From a service providers perspective, IMS isnt simply a platform to deploy a suite of applications, no matter how killer the application might be. In fact, if network operators were to take on more of a tactical approach looking for particular instances to trial the platform, then perhaps AT&T could afford to rest on its laurels and possibly stall the deployment of IMS for the rest of the industry by sitting on its proverbial hands. But, as evidenced by Stephensons opening remarks from the conference call, AT&T already has a full-scale strategy in place for the deployment of next-generation IP-based services.

If you believe and embrace a strategic motive behind IMS, can you afford to wait? No. There are too many benefits for one to remain sidelined, explained Ronald Gruia, Program Leader of Emerging Communications Solutions at Frost & Sullivan.






In fact, AT&T, BellSouth, and countless others have already tried the one-off approach to bundling. Even by their own admission, those attempts have failed.

I think, to date, an awful lot of the benefit of bundling has come in a single bill, simplifying the relationship. But, in terms of truly simplified integration of the functionality of the two products, with the exception of integrated voicemail and some of those kinds of things, it has not been that dramatic, said Mark Feidler, president and chief operating officer of BellSouth.

And here again I think as we move to a more IP-based world facilitated with an IMS platform in place, you really do have the opportunity to give people the experience that a lot of companies have been talking about, which is the benefit of any network, any device, any place kind of functionality in a simple way for the customer. And the combined assets of these three companies, I think, will be enormously well positioned to fulfill that promise thats been out there for a long time and, today, quite honestly, nobodys done a great job. I think this company is very well positioned to be the one that steps up and does that, Feidler added on the conference call.

AT&Ts migration into IMS was inevitable due to a confluence of circumstances. VoIP and cellular penetration continues to accelerate access line erosion and eat away at the local and long distance revenue base. All of this wouldnt have happened if the cable companies didnt move into telephone, Kagan told INTERNET TELEPHONY.

Yet, they did. Consequently, all of the incumbents have been forced to counter that assault by pinning their hopes on future technologies, like IMS.

What AT&T wants to become is the link to your brain. They dont only want to be your communications company. They want to be your entertainment company, said Steve Dietch, worldwide marketing director of the OpenCall Business Unit at HP.

But analysts and industry participants concur that AT&Ts entrance into IMS services isnt necessarily a bad thing. In fact, if one enormous buyer could influence deployments schemas, the rest of the industry could benefit by avoiding the fractionalization of semi-proprietary flavors of the IMS architecture.

If theres one thing thats easy to forecast, its vendor behavior in the sense of their appetite for introducing proprietary technology. They need to make their products more competitive. Theres going to be a lot of SIP extensions. This is going to create havoc in the developer community because they will need to bone up on the different flavors, Frost & Sullivans Gruia said.

IMS will benefit down the road, because you dont have a fragmented approach to it, Dietch told INTERNET TELEPHONY. He serves as the HPs primary spokesman for IMS-related issues, adding that, A lot of operators went with a semi-proprietary approach to their trial for IMS and will circle back for a standards approach down the road.

Based on Feidlers remarks, AT&T is taking no chances and is employing the unified approach.

Its clear that all three companies have been exploring the possibility of using IMS as the fundamental platform for provision of services on their own network. And we, as three separate companies, were working on how we could integrate our IMS platforms to provide integrated services between the companies. The standards are pretty well established now. Fortunately, we had similar thoughts about how to utilize IMS. And the fact that we will all be on the same backbone network, the same instance of IMS, following the closing of the transaction, will just really simplify the process because we wont have to make multiple IMS platforms communicate with each other. Essentially we can do that all on a single platform, Feidler said.

To be sure, IMS also could also represent a double-edged sword for AT&T by opening a new can of worms in the form of increased competition. For example, Orange Wireless recently announced the rollout of business-class fixed-line service in the United Kingdom, going head-to-head with BT.

From an IP perspective, its once again a threat and an opportunity. By creating an IP infrastructure, you open yourself up to competition that wasnt previously there, HPs Dietch said.

However, not everyone agrees, as analysts like Gruia still see AT&T with the upper hand. They are not relinquishing full control over their network. Fear that service providers will relinquish all control of their networks is a little bit exaggerated. Therell be some more control, more intelligence that comes from the endpoint, but its not going to be a dumb network, he said.

While it remains too early to predict which ISV or service provider will ultimately win out, one clear winner has emerged: Lucent Technologies. Tim Horan, analyst at CIBC World Markets, believes AT&Ts unified approach to IMS could mean additional work for the equipment vendor, which has already been contracted by all three companies to supply comprehensive IMS solutions. IT

Roberts 15-year communications career spans from the print world to television and to the Internet. He has covered business and technology writing for Dow Jones, Bloomberg Business News, CNN, and Jupitermedias internetnews.com. He has served as a producer at CNN, Headline News and A&E Television Networks. You may contact Robert at rliu@tmcnet.com.

If you are interested in purchasing reprints of this article (in either print or PDF format), please visit Reprint Management Services online at www.reprintbuyer.com or contact a representative via e-mail at tmcnet@reprintbuyer.com or by phone at 800-290-5460.

[RETURN TO THE TABLE OF CONTENTS]



Today @ TMC
Upcoming Events
ITEXPO West 2012
October 2- 5, 2012
The Austin Convention Center
Austin, Texas
MSPWorld
The World's Premier Managed Services and Cloud Computing Event
Click for Dates and Locations
Mobility Tech Conference & Expo
October 3- 5, 2012
The Austin Convention Center
Austin, Texas
Cloud Communications Summit
October 3- 5, 2012
The Austin Convention Center
Austin, Texas