IP Multimedia Subsystem (IMS): Is it all Hype or will it Drive Significant Revenue?

We believe that IMS will follow the same adoption curve as many new technical approaches.  The important thing is not to get so enamored with the technology and focus on the business goals, which as we see them are: 

·        Lower costs

·        Faster time to market

·        Multi-vendor approach

·        Standardized third-party interfaces

·        New, innovative multimedia services

·        Increased revenues

·        Central repository for customer data

 IMS issues to Consider: 

·        The big drivers are Lower Cost and New Revenue Sources:

·        The greatest challenges for any telecom service provider are to operate their networks at the lowest unit cost structure possible and open new sources for subscriber revenue.

–         IMS systems offer the opportunity to do both in the long term. In the short term, carriers must expect to invest more capital and make the network a little more complex before it gets simpler.

–         The search for new sources of revenue will lead carriers to introduce multimedia content and innovative new services over networks that have dramatically improved throughput as compared with just 3 to 5 years ago.

–         IMS technology will help carriers experiment with new services and bring them to market more quickly and at a lower cost. Ultimately, the marketplace will determine the successful mix of features and carriers will continuously innovate to follow where the market leads them. 

What is IMS? 

·          IMS is not a standard itself but is supported by many standards from many places including:

§         3GPP, 3GPP2, IETF, ITU, OMA, Cable Labs, etc.

·          IMS is a framework for NGN services environment

·          IMS does not standardize services – it standardizes enablers

·          IMS is an attempt to provide control to IP-based services 

What is Driving IMS? 

·          IMS is driven by convergence

§         Convergence of technologies: IP is the common network protocol

§         Convergence of networks: wireless and wireline networks sharing nodes

§         Convergence of access: handsets that access more than one network

§         Convergence of services: features that follow the user across networks

§         Convergence of content: access the same content across multiple networks

§         Convergence of revenue: user’s demand is divided across fixed and mobile

§         Convergence of control: customer control over service provider features 

Why are the Carriers even looking at IMS? 

·          All Carriers have hit a growth Plateau:

§         Voice and data commoditized

§         Channel line-ups the same across cable providers

§         Competition is based on pricing

§         Wire line providers hurt from Skype, Vonage, etc.

·          Converged services will yield more revenue

·          Triple / Quadruple Play

·          Enterprise Services will create new opportunities 

What is IMS supposed to do for carriers? 

·        Lower Operational Costs

–         Maintenance

–         Integration of new equipment

–         Integration of new applications 

·        Lower Capital Expenditure Costs

–         Purchasing of new equipment

–         Dimensioning the network

–         Converging IMS Networks 

What Market Impacts are affecting Carriers? 

·        Changes affecting the Wireline Carriers:

–         Losing voice revenue to wireless networks

–         Stagnant stock prices under perception of commodity service

–         Introduction of DSL technologies positions them as broadband internet access providers

–         Building out fiber and Ethernet networks to offer multimedia and video on demand

–         Supporting convergence and IMS to offer voice mobility on WiFi networks

–         Broadband and Ethernet offers enterprises with VPN and vertical solutions

–         IMS offers the ability to support multi-network services with wireless affiliates 

·        Changes affecting the Wireless Carriers:

–         Growth in voice service revenues is slowing

–         Need to supplement voice revenue with new, innovative data applications

–         Rapid expansion of network throughput through 3G technologies (EV-DO, UMTS, HSDPA)

–         Younger, more flexible infrastructure that can more quickly adopt IMS technologies

–         Supporting convergence as a way to defensively increase customer retention

–         New revenue sources through multimedia streaming and download content

–         IMS offers the ability to support multi-network services with wireline affiliates

–         New partnerships with private-brand Virtual Network Operators and service creators 

What about Operational Cost Savings? 

·        Since IMS platforms integrate common billing, support and maintenance interfaces through open standards, the carrier can simplify their operations and reduce expense costs.

·        IMS platforms offer an open architecture for new service creation and delivery without having to replicate provisioning and billing support for each application, the time to market and cost to introduce new features are also reduced.

·        IMS platforms are not economically viable if the goal is simply to replicate existing services in a new architecture. The payoff of adopting IMS-based systems is to develop and introduce new value-added services for incremental revenue at a lower cost per subscriber. Leveraging a common set of billing and support systems through IMS open interfaces is a critical element to reducing operating costs to launch new services more quickly and maintain operating margins. 

What about Capital Cost Savings? 

·        Under the IMS framework, all major network functions comply with open standard interfaces. Further, all services whether voice, data, or multimedia, are IP packet-based and carried over a common core infrastructure. Only the access technology is specific to the transmission medium used (wireless 3G, WiFi, Ethernet, etc.).

–         Reducing the core network to an all-IP technology simplifies the architecture and capitalizes on the economies of scale of computing platform technology to lower equipment costs.

–         The open standardized interfaces between nodes allows carriers to source their network equipment from multiple vendors supporting overall lower capital costs.

·        Even though the IMS framework supports lower costs, the network is destined to become more complex and more expensive before it gets simpler and cheaper. The reality is that today’s networks are already loaded with infrastructure with long depreciation cycles are still earning a return on their original investment.

–         Even wireless networks, which have the lower average age of plant, still have large volumes of imbedded investment with some recent high investments for 3G that have yet to provide their full return. The result is that carriers will want to continue to use existing infrastructure to provide new services.

–         In the short-term, this will introduce new dedicated-purpose autonomous platforms to offer some specific pre-IMS features using the imbedded infrastructure. Also, carriers will implement special purpose inter-working platforms to link existing pre-IMS networks together.

·        The capital investment choices by carriers in the transition to IMS are critical to how quickly they ultimately reach a lower cost network structure. Choosing too many hybrid solutions too early will waste investment or delay the migration to a heterogeneous IMS environment. Carrier focus should be on ensuring it does not become less reliable at the same time. 

What makes up IMS? 

·          Services Plane: contains the content and administrative platforms including media servers with media content, billing systems and application servers.

·          Control Plane: contains all the call control and authentication functions for call setup, handoffs, and billing recording.

·          Transport Plane: contains all the traditional network switching and transport nodes found in today’s wireline and wireless networks 

More Information 

For more information, see: 

IP Multimedia Subsystem (IMS): The Market for Applications and Services 2011-2016 

This report presents a qualitative and quantitative analysis of the role of IP Multimedia Subsystem (IMS) in implementing rich multimedia applications. This report evaluates a variety of IMS market opportunities and places emphasis on a few key applications including: Video Calls, Unified Messaging, Push-to-Talk, Wireless Wireline Convergence, Online Gaming, and Video-on-Demand. 

http://www.mindcommerce.com/Publications/IMS_Applications_Market_2011-2016.php

About Mind Commerce

Analysis of telecom and ICT infrastructure, technologies, and applications.
This entry was posted in IP Multimedia Subsystem (IMS), Next Generation Networks (NGN), OSS, BSS, and Back-office systems. Bookmark the permalink.

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