By Kenneth Chen

Service providers and equipment vendors, both wireless and wireline, have recently expressed great interest in IMS (IP Multimedia Subsystem). IMS is a system consisting of standard protocols plus traditional Telecom’s needs for business model and operation model. Although it has its roots in wireless, IMS is a system based on Session Initiation Protocol (SIP). Therefore, it has appeal to almost everyone in the Telecom ecosystem. However, like the Akira Kurosawa classic film Rashomon, what telecom service providers and vendors see in IMS is often very different. Each looks at IMS through the lens of what they need to compete within an existing business model. However, this view often omits what the telephony users are demanding. They have jumped on open standards, such as SIP, to provide them with a larger degree of choices at competitive prices.

Wireless Service Providers
The average revenue per user (ARPU) value of wireless communication is consistently decreasing. Subscribers are making more calls, and using more minutes, but their phone bills are getting smaller, instead of larger. Mobile data is an important method to increase ARPU. Mobile communication service providers are actively seeking ways to create new revenue sources via expanding the range of their mobile data offerings. However, the service cost calculation method of traditional IP (or Internet) services cannot satisfy the profit needs of mobile communication service providers (as IP/Internet services are free to Internet service providers). Mobile service provides a mobile data platform that is beneficial to mobile communication service providers through user identification, signaling control, and usage-based billing technologies. This enables a wide variety of data services that conform to this standard to be launched on the mobile network, allowing these service providers to profit from an IMS platform.

Traditional Wireline Service Providers
Due to the same characteristics, IMS is appearing even more attractive to wireline service providers than to mobile operators. Wireline service providers have also taken tremendous interest in IMS because it can enable interconnection between wireless and wireline networks (for example fixed mobile convergence or FMC). Traditional telecom service providers have also found a need for IMS as the solution for their need for Triple Play. As traditional telecoms generally adopt one system for their entire range of services, IMS with its all-in-one capabilities make it an easy and obvious choice for them. Another advantage IMS presents to traditional telecoms is the capability to support end-user control and value-added service access control, which is essential to ensuring the continual success of existing business and operation models. However, the prospect of IMS is not without its perils. As a newly emerged standard, the range of offerings based on IMS is still fairly limited.

IP-based Service Providers
Service providers that use IP-based networks can rely on pure SIP to provide the services that are being promoted for IMS. SIP — as an open standard protocol — inherently supports network interconnectivity, which is the foundation upon which new telecoms based on IP are founded. The problem with SIP is that it does not offer an all-on-one solution package like IMS. Fortunately, new IP telecoms are used to accepting and adopting new standards (for example SIP, http, radius, etc.), and rarely employ a ready-made operation system. Instead, they create customized business models and operation models based on company and customer needs. However, this benefit also presents risks to the pure SIP operators. Pure SIP operators still need to create a set of business models that can reach beyond the traditional ideas that IP/SIP-based telephony offerings are only valuable as free or low-cost alternatives to the PSTN. Pure SIP operators need to create revenue models and profit models for themselves and their partners that provide innovative values and are recurrently profitable.

SIP Versus IMS
From the traditional wireless and wireline telecom service providers’ point of view, IMS might present a more attractive view because a simple and open standard like SIP does not provide enough control over their end users and value-added services to suit their business model. However, the story is quite different from perspective of IP-based service providers and content providers. Every telecom operator is planning to use its own version of IMS. In order to distribute their services and content over a telecom service provider’s network, independent IP-based service providers and content providers must work with operator-specific business and technical requirements. This limits the ability of independent IP-based service providers or content providers to easily partner with multiple telecom operators. One of SIP’s main benefits is that it offers easy convergence to value-added service and application providers that develop their products based on SIP. The partnership models between pure SIP telecom operators and independent service providers and content providers can be much more flexible, as the area is not yet solidified, thus allowing more room for creative solutions. New independent value-added service providers and content providers are also arising out of the abundant opportunities, just as with the development of IP in the past ten years.

From the end users’ perspective, IMS and pure SIP also offer very different values. End users in the IMS architecture can only access services provided by the telecom operators or their value-added service provider and content provider partners. End users in a pure SIP environment, on the other hand, might have more flexibility in selecting from product offerings. When looking at the issue of IMS versus pure SIP, one also needs to look into the fundamental differences between traditional telecommunications network and the Internet. Traditional telecom networks are limited by geography coverage and network concentration locale. Crossing over boundaries require higher cost (for example, roaming charges). As IMS is being developed to respect these boundaries, traditional wireless and wireline telecom operators are welcoming it. A SIP-based network maintains the open and public nature of the Internet. IP telecom operators have adopted the open SIP standard and their operation model and business model derived from this open standard. If a public, open SIP network indeed becomes successful, it could provide a new open telecom environment and many business opportunities.

An open and simple standard, such as SIP, may not be able to satisfy all aspects of the operational model and business model needs of traditional telecoms. But, as an open standard unshaped by operation and business models, SIP could be the foundation for an IP-based business model that responds to the needs of users, who are embracing open standards.

Conclusion
It is impossible to predict whether one will overcome another or both will merge into a newer and better solution. No operator is presently using IMS to launch products into the market. High-growth SIP operators have not yet amassed enough customers. Notwithstanding all of the recent hype about IMS, don’t underestimate SIP. It may not get as many press clippings, but an open standard often brings the power of grass roots support — which is one of the hallmarks of success with the Internet. The shape of the ultimate Triple-Play solution just might be staring at us if we look in the SIP mirror.