* ABI Research survey finds significant progress in the development of IMS standards
Operators of fixed and mobile networks will invest more than $10 billion in IP Multimedia Subsystems (IMS) over the next five years, powering many new services for business customers that will become available in the next two years. That’s the latest finding from ABI Research, which forecasts that service providers will generate nearly $50 billion in revenue from IMS-enabled applications in the year 2011.
In its second annual survey of IMS spending by carriers, ABI found significant progress in the development of IMS standards as well as a bigger push into enterprise applications for the technology.
“IMS is now the standard for implementing new multimedia services in next-generation IP networks,” says ABI Research Analyst Ian Cox. “It’s true that most carriers are in proof-of-concept stage or trialing services. But at the end of the year, we would expect to see most of those carriers announcing new services and the industry moving forward quite rapidly next year to commercialize those new services because time is running out. Traditional voice revenue is disappearing, and carriers have to do something.”
In the United States, the carriers that are leading the charge into IMS are Cingular Wireless and Sprint Nextel.
Cingular will launch several services later this year and early next year based on its IMS investments, Cox says. He says that Cingular is not releasing many details about these new services, which are being integrated into its billing system.
“The first service will be useful to both business and consumer users,” Cox says, adding that he believes it will be a video conferencing service. “The second service is totally aimed at the consumer market. Cingular will launch a new handset that will combine SIP data traffic and circuit-switched voice traffic for a chat type application.”
Sprint Nextel also is rolling out IMS-based applications. “They’re talking about launching an IP Centrex service,” Cox says. “By 2007, they will be hosting some PBX application services on their network aimed at corporate users.”
Cox says business customers will benefit from the IMS investments being made by fixed and mobile carriers even though much of the hype surrounds new consumer services. In particular, he favors IP Centrex services as providing many benefits to mobile workers.
“With Centrex based on IP you’ll be able to integrate voice with other services so you’ll have the full availability of all the things you have on a PC on a mobile handset or a desk phone,” he says. “These devices will integrate instant messaging, presence, voice and Internet access all in a single device that you can take with you when you leave the office…This is a clear benefit to business users.”
Cox says IP-based voice services promise efficiencies and cost reductions over circuit-switched voice. “Replacing existing LAN, voice and data networks with a single converged IP network will bring with it reductions in operating expenses,” he adds.
ABI admits that carrier migration to IP-based technologies is happening slowly and cautiously. “It’s a complicated migration story,” Cox says. “Carriers may have a fixed network, a mobile network and a separate data network based on Signaling System 7. All of that has be converged and migrated to an IP core.”
Cox says innovative carriers will begin introducing IMS-based services this year and next year. “By 2008, virtually everyone will be launching some services with IMS as the core,” he says. “By 2015, most carriers will have an IP core running fixed and mobile applications.”
Cox cited more support for IMS standards as a driver for carriers adopting the technology. He says standards bodies including Third Generation Partnership Project (3GPP) for mobile operators and Alliance for Telecommunications Industry Solutions (ATIS) are developing enterprise-oriented standards as well as standards for fixed/mobile network convergence.
“There is a groundswell of support for IMS standards, and that’s a big change from last year,” Cox says. “A year ago, questions were still being asked about whether this was the right thing to do. Now everyone is supporting the standards.”
Support for the convergence of fixed and mobile networks is highest in Europe. For example, France Telecom recently announced that it was branding all Internet, mobile and TV services under the name Orange for consumers and Orange Business for business customers. Similarly, Vodafone is offering mobile broadband services in Germany using High Speed Downlink Packet Access (HSDPA) technology.
“Most of the incumbent carriers in Europe have indicated that they are going to one converged network for fixed and mobile services,” Cox says.
Cox says that carrier consolidation in the U.S. – such as AT&T combining with first SBC and now BellSouth – is a sign that “the various fixed networks on their own don’t have the critical mass to survive in the long term. The competition is now between fixed and mobile and cable operators.”
To read more about ABI’s research on carriers’ IMS investments, click here.
