IMS has gained substantial momentum as the standardized architecture for the convergence of communications service delivery. But many early adopters have taken a network-centric approach to the benefits of IMS deployment rather than taking a holistic view of the strategic opportunities.
Global industry analyst Stratecast estimates that capital expenditure on IMS infrastructure will rise from $179 million in 2006 to more than $10 billion in 2010. Informa takes a more conservative stance, forecasting worldwide capital spending on IMS infrastructure to reach $4.5 billion in the same period.
Others believe there will be a delay in market acceptance until the success of early adopters becomes visible, followed by a significant ramp up in 2009 or 2010.
Most industry commentators accept that virtually every major telco is now including IMS in one form or another in strategic planning. The industry has, for some time, been working towards the adoption of triple play, quadruple play and fixed-mobile convergence (FMC) - all of which are enabled by the potential of IMS.
IMS helps standardize protocols to eliminate proprietary technology and enable interoperability for all IP-based services, and provides the opportunity for ubiquitous access for users regardless of service, terminal type or location.
Key considerations
Telcos are undergoing a period of dynamic change in the provision of services, so they need to have strategies to react to change effectively - and adoption of IMS is a key component. A concern is that current approaches to IMS may end up missing significant opportunities for the future.
The first consideration is that IMS is only linked with the short-term issues of deploying new services cost-effectively. Many service providers believe IMS is purely a network engineering issue and their IMS adoption business case is only based on operational expenses reduction for network and service management.
If cost reduction is the basis for the business case, then IMS adoption and the resulting competitive strategies will proceed incrementally at the pace of normal equipment replacement cycles.
While network consolidation and opex savings are admirable objectives, new competitive threats from the internet-based world are fast emerging.
Capacity demand is unlikely to significantly ramp up in the short term and the major "New Age" telcos present a threat to future revenue as they begin to redefine the direction of telecom and broadband services.
For established service providers, IMS implementation has to be more about the introduction of new multimedia services, P2P services like video sharing, and innovative service bundling.
The second consideration is that IMS should be recognized as a horizontal technology, offering potential benefits across the service provider's entire portfolio, and linking the network management and IT operations departments for both wireline and wireless services.
If a network equipment provider bundles the key IMS charging technology with its next generation equipment to enable the network engineering department to retain ownership of IMS mediation projects, then how does this affect organizational strategy‾
Service providers should consider a pragmatic approach to IMS adoption by exploiting existing technology investments and gradually replacing legacy network and OSS/BSS elements.
They should also consider the deployment of proven IMS charging technologies with the flexibility to handle rapidly evolving business models without compromising service capabilities at the expense of the network.
The third consideration is the evolution of triple-play and quad-play services and new revenue generating opportunities. IMS deployment helps service providers integrate discrete fixed and mobile network technology to deliver FMC and reduce time-to-market for new services.
However, many service providers should do more research to determine what sort of services customers want to receive.
Service providers should focus on the revenue generating potential of new services as a key driver to FMC by exploiting IMS as a means to obtain a larger share of the customer's wallet.
The adoption of IP-based communications and value-added service strategies will open new wholesale business opportunities for service providers, including integrated transport solutions, multiple platforms for customized solutions and a wider services portfolio.
Currently, VoIP appears to be the service most frequently targeted for initial IMS deployment and is sometimes enhanced with IMS-related application services like personalization, presence or special routing.
The fourth consideration is one of differentiation. IMS is about offering new opportunities in an open and standards-based framework - enabling rapid and cost effective "plug-and-play" capabilities for multimedia services, regardless of service delivery platform types and end-user devices.
However, equipment and application vendors are attempting to differentiate services outside that framework and are enforcing their own extension to provisioning and charging standards.
For IMS to work properly and deliver to its true potential, it is important to ensure interoperability and facilitate the progress of open interfaces and standards in an all-IP world.
Differentiation comes from a compelling mix of services, flexible charging options and consistently high-quality, multi-channel customer care - not from the deployment of proprietary technology.
Future investments
Service providers are starting to invest in IMS, taking into account how they can benefit from IMS in the short term to streamline network architectures and to reduce operational costs.
While this may help reduce opex, the strategic opportunity is to enable new competitive revenue opportunities associated with the growth in multimedia, content and FMC services.
If service providers will shift from network-centric to service-oriented organizations, they should invest in highly adaptive infrastructures to exploit the full potential of IMS and next generation BSS/OSS.
This will enable them to charge, bill and manage a wider range of complex services - services that will have increasingly shorter lifecycles, intense competition, increasing price pressures and will require back-office systems to manage them profitably and efficiently.
Simon Dadswell is advanced solutions marketing manager at Intec Telecom Systems