The service provider business segment is in the process of morphing into multiple parallel lines of business. YouTube.com, Google.com and MySpace.com consider themselves next generation or alternate service providers.

These companies are just the tip of the iceberg for the number of new entries in this market in 2007. Low entry cost and high growth driven by ad-model revenue is fueling this next phase of network growth and investment.

The second new line of business in this segment is managed service providers. Classical service providers such as cable, wireline and wireless carriers make up the next class of lines of business.

2007 will see more of the same for Wireline carriers: IP Multimedia Subsystem (IMS) implementations for consumer services; Ethernet replacement of SONET/SDH for metro networking; Gigabit Passive Optical Network fiber-to-the-node coupled with very-high bit rate Digital Subscriber Line last mile copper access for IPTV; common wireline/wireless infrastructure equipment convergence using Advanced Telecom Computing Architecture blades; business support systems/operations support systems services integration; and conversion to a complete IP network infrastructure.

Capital expenditure demands are huge and are being fueled by increased competition and technological changeover to an IP-based plant. Wireline carriers worldwide are losing revenue to wireless carriers and cable companies at a rapid pace.

If 2006 was known as the year of that service providers created the triple play (voice, video and data) bundle, then 2007 will be known as the year they introduced the quad play (voice, video, data, and mobility) bundle. To add even more marketing spin, waiting in the wings for introduction in 2007 is quad plus play, which adds telemetry services to the bundle.

One of the greatest untapped service provider opportunity areas is real-time telemetry/surveillance, such as physical premises security, medical monitoring, utility monitoring, road congestion control and disaster recovery.

IMS is still in its infancy with few applications implemented by services providers. The International Telecommunications Union is finally addressing IMS’ major deficiencies as a software platform with the next release called IMS.7 targeted for 2007.