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Is IMS still set to be part of the networks’ bright future?
Just a few short years ago, most operators and vendors in the mobile space were persuaded that significant numbers of customers were hungry for rich, IP-based multimedia services. The answer to that demand was IP multimedia subsystems (IMS), a single IP-based architecture for the network.
However, in the last year or so, enthusiasm has begun to wane and most commentators now agree that widespread commercial deployment of this architecture, and the ‘golden future’ that it was expected to usher in, won’t happen until at least 2012.
Too much effort?
This is because creating an all-IP network requires a complete reengineering of the core network. The industry, therefore, must accept that going beyond GSM, GPRS and UMTS is a long term strategy, not an immediate answer to the commercial and competitive questions being asked today.
While the long term future of the industry may indeed be predicated on mass
market adoption of highly profitable advanced data services, the need to increase revenues and create differentiation cannot wait. To remain competitive and retain revenues in the short and medium term requires mobile operators to look again at their existing infrastructure and re-evaluate the value of their switched voice networks.
The plan for many network operators is to entice subscribers away from competing mobile, and increasingly converged internet, providers with huge voice bundles, and then market, for all they are worth, their emerging high value data services. The hope is that this will encourage consumers along the path of mass market adoption, off setting the impact of voice commoditisation and getting data revenues moving in the right direction.
However, the reality is that 95% of current ARPU in the mobile space is still coming from simple person to person services such as voice and text and more recently, instant messaging. And this picture is not going to change significantly over a five year window based on industry forecasts.
Bovered?
With most revenue coming from current generation services how does the mass deployment IMS business case hold up? Frankly it doesn’t, as it cannot be justified on the basis of migration of current services onto this new infrastructure, as there is no financial benefit to do so. This leaves IMS with smaller scale niche deployments that address specific multimedia or community opportunities, although IMS does hold promise for managing larger community service offerings.
The challenge of these community offerings, for example, is that they cannot be based on a single network operator; there has to be a totally compatible service offering across all the operators, so that a community can grow without users having to change providers to join their friends. This has already tended to focus these communities on using their mobiles for pure internet access to current service offerings, pushing the operator towards a bit pipe position.
What the operator is missing is how to leverage current generation services to build value on and around these offerings. The operator has access to the mobile community and has voice and SMS offerings with the potential to build innovative P2P communication paths within and around these communities.
So if the mobile operator had access to innovation tools on current generation networks they could do a more effective and intelligent integration into community services.
Applying new generation application server technologies to current generation networks opens up a new world of innovation. Are current networks sexy and high profile? No, but investment in these traditional networks will provide a stronger, incremental and more predictable business case.
What if?
What will happen if mobile operators do not innovate around these services? The competitive forces of the industry would suggest that innovation around all IP voice networks and messaging services could provide the basis for subscribers leaving mobile voice services and using pure internet access as their means of communication, impacting significantly on revenue streams from current infrastructure. Maintaining high voice revenues will be impossible as VoIP sharply levels the playing field.
On a more global and economic basis, we should also look at the economic difficulties being experienced and the impact this is having on consumer confidence and spending. The operators are going to have to flex their current investments, as heavy investment in widespread infrastructure swap out during times of economic uncertainty, and with no clear business benefit, will not best please shareholders!
Mobile communications for the foreseeable future will continue to revolve around person to person services, and that’s the major market that service providers will have to look to for further revenue growth in the short to medium term. As proved by exposure to IMS over the past four years or so, there’s not going to be a sudden quantum leap towards an all-IP mobile world, but rather a slow and steady progression that builds on existing customer behaviours, current usage and critically, opening up, and taking full advantage of, existing network technologies.
OpenCloud was formed in New Zealand in 2000 to create open standard software that would revolutionise the portability and interoperability of services in telecommunications, specifically in the evolution to IP and 3G IMS.
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