[IMS Group] Updates on IMS business case

[Frederico Gonçalves]

Updates on the IMS business case

Most IMS reference papers and books lists many benefits from IMS deployment: QoS, Flexible Charging, Open APIs, Short time to marked, etc. However the carriers are still relutant to go for IMS, what probably means that the theory still did not convince them about IMS. The applications developed so far actually enforces the operators relutance, since no killer IMS application appeared until now...even worse, all applications that are being developed as demos and trials for IMS seems to be also viable in current networks, using regular data accesses. On the other hand, the mobile sector seems to have taken a decision to go to Internet based platforms, with big players (like Motorola, Sony Ericsson, HTC and others) going towards Google operating system and Internet applications that don't seem to need IMS at all (and also won't wait for IMS to become a reality). I would appreciate if you could share your experience and vision for IMS in this context. Thanks a lot.

Posted 4 days ago

Comments (8)

1. Tom Nolle

   President of CIMI Corp and Chief Strategist at ExperiaSphere

   IMS would likely be a part of any near-term 4G deployment, in my view, simply because it's the only proven platform for PSTN-like services over IP. If you have circuit-switched voice options for mobile you don't need IMS, so the most likely determinant in IMS's future would be the pace of 4G rollout. Slow and it's likely other applications than voice would be revenue drivers, and voice might then be proven out over some other mechanism (P4P?). Fast and IMS is the only game in town. IMS could improve its future by accelerating some of the changes that are implied in the latest ITU visions.
   
   Tom

   Posted 4 days ago | Reply Privately

2. Frederico Gonçalves

   Development Analyst at Venturus

   Hi Tom, thanks for your comments. I agree with your position regarding IMS for PSTN like services, but IMS also brings the promisse for new rich multimedia services that could increase the operators revenue.
   
   Besides VoIP services, do you see new promissing multimedia services that rely on IMS (and that would not succed to be implemented without it)?
   
   Could you share your vision for IPTV, video sharing, etc. over IMS? Is there other strong revenue scenarios for operators based on IMS?
   
   Thanks a lot for your help, others feel free to join the discussion.
   
   Rgds,
   Frederico

   Posted 4 days ago | Delete comment

3. Gilles Chenu

   senior consultant at Neotilus

   Hi,
   I don't think that one can create through IMS a single-device-access service which could not be done on another solution in a way or another.
   
   I see IMS as a way to globalize and spread services accross various networks/domains (PSTNs, Mobile phone networks, VoIP networks, ...) which can use different protocols and different security rules.
   
   I believe IMS can play for the service community the same role english played for global communications, a mean of communication that everyone can understand and use to communicate with people from various cultures. As it has been the case for English, IMS won't replace the existing service networks, but provide a gateway between them, allowing to spread services among users of multiple networks/domains instead of a single one, while leaving the possibility to implement services dedicated to a particular network.
   
   Basically, as stated in an other discussion, IMS is a big part of the anywhere/anytime vision, and I believe that in order to create a service that explicitly requires IMS, one must think about cross-network/domain services.
   
   Please feel free to share your views on this,
   
   Gilles

   Posted 4 days ago | Reply Privately

4. Tom Nolle

   President of CIMI Corp and Chief Strategist at ExperiaSphere

   I think there are challenges with IMS beyond basic voice services. The problem is that the Internet has defined a very effective model for content delivery, application access, etc. and that model is not based on IMS nor are its protocols particularly compatible with SIP sessions. I agree that IMS has to find value beyond voice, but I think that can be done only by working through some changes in IMS approach. The ITU seems to be favoring the notion of having IMS Service Control coexist with parallel IPTV and other Service Control frameworks, which I think would end up relegating IMS to the pure voice side of the picture, which makes it less relevant every year. It would be more constructive for IMS to revisit Service Control and generalize it to facilitate sevice relationships using protocols other than SIP.
   
   The cross-domain aspects of IMS are potentially valuable to be sure, but I think a general approach to syndication of service features (which is underway in a couple of standards teams already) would likely resolve that problem at a higher level. That's important because as long as you have to provide Internet access to mobile users you have to compete with the Web's mechanism for delivering content and even creating voice services (P2P).
   
   SIP/IMS is a decent strategy for any pairwise communication service--party to party. It's far less valuable for party-to-experience connections.

   Posted 3 days ago | Reply Privately

5. Manuel Vexler

   CEO at Vivaja Technologies

   Migration, evolution, overlay. These are the key words to the way business planning is applied (i.e. driven by network and service economics). Hence is natural to start with major current or promising revenue generators; that is VoIP today. Once IMS is included in the network, the question will become how new services will be rolled out. If the new service can justify a new architecture than IMS will become legacy...otherwise will be part of an interworking solution, giving us one more step toward converged services.
   
   Manuel

   Posted 3 days ago | Reply Privately

6. Frederico Gonçalves

   Development Analyst at Venturus

   Hi everyone, thanks once more for your contribution. Trying to sumarize, please feel free to add comments or correct me:
   
   PROS: IMS is a key solution for VoIP or PSTN like services CONS: however it's also clear that the revenues on regular voice communication services are becoming less atractive to operators.
   
   PROS: IMS intends to bring IP multimedia services to the mobile arena, using standard protocols and APIs to reduce time to market, increase number of services and, finally, increase operators revenue CONS: Most services planed for IMS can be deployed on current networks. The Internet comes in this scenario as a challenge since it is a live network with a very agressive business model.
   
   PROS: IMS seems to have an important role in the convergence of services for different networks and domains, such as VoIP, IPTV, Internet services and others. CONS: other service control frameworks, such as IPTV, coexist with IMS. This may relegate IMS to voice based services once more. Besides that if most services are internet based, and considering the incresing internet ubiquity, IMS may also not be vital for service convergence.
   
   The question I would like to raise now is:
   
   In such a unclear business model and a clear competition from Internet, would the operators eventually go towards a simpler bit-pipe model offering IP based access (cable and over the air), leaving services to other companies in a open Internet arena? Does it sound possible or is it just not feasible (and maybe even crazy!) at all?
   
   Thanks in advance,
   Frederico

   Posted 3 days ago | Delete comment

7. Gilles Chenu

   senior consultant at Neotilus

   Hi Frederico,
   
   concerning the answer to your last questions, french mobile operators are split upon it. Orange clearly does not want to be relegated to a simple bit-pipe, and it seems to be the same with SFR. The last operator is still waiting to see how things develop, fearing that microsoft or google may deploy their own service platform against which they could not compete.
   
   Gilles

   Posted 3 days ago | Reply Privately

8. Jeroen Van Bemmel

   Business Development manager at Alcatel-Lucent

   There is great value in being a bit pipe provider, because your users depend on you for vital information and entertainment each and every day. You are therefore very relevant to them.
   
   Internet players, or "over-the-top" players, attract the attention of the same users. As a result, the users no longer see the bit pipe, because their attention is drawn by the content. The good news is that these two models can coexist: attention is what advertisers pay for, and even though the user doesn't think about the bit pipe below, they still pay for it every month.
   
   There is no fundamental reason why operators couldn't do both, in fact many are trying to move into ad-funded models/eco-systems. For most, it almost seems like it is not in their "nature" (some say "core business") to have an advertising based model. For sure in terms of revenue, bit pipes are still king.
   
   In most (all?) cases, IMS is deployed using a traditional telecom business model (subscription and usage fees). But subscribers don't pay for "IMS" (they don't even know what it means), they pay for the services delivered/enabled by IMS. So "the IMS business case" does not exist. In my view it should be built as a statistical mix of business cases for individual end-2-end services that subscribers would pay for.

[Tom Nolle Public]

I think the role of “bit pipe provider” is the role of a public utility, and most operators worldwide are no longer that.  As “normal” corporations they must compete with other companies in the capital markets, and that would be difficult if they were to be selling bits.  Revenue per bit, according to my survey of operators, is declining at 54% per year (in 2008 and 2007; about 50% in the prior 3 years).  That says that the role of a pipe provider is not financially viable.  Ultimately operators will have to recognize what I’ll call the “truth of AIN”; custom calling is where all the profits were, not completing calls.  Thus, feature hosting is what is valuable.  The challenge for operators is to recognize that truth (one they’d accepted before and one that you could argue IMS is a means of addressing) but also recognize that the market is moving faster than their traditional processes.  They’ve been successful as plumbing because nobody else wants that role and because it’s a long-capital-cycle role.  They’ve failed in services because that role is short-cycle and it’s also competed for.  Fixing the failure means adopting the practices of the winners, and those practices focus on market velocity, flexibility, and most of all breadth of developer and application support.

 

Tom

 

---

[Anuradha Udunuwara]

The future voice communication is going to be wireless, mainly due to its convenience. The wired connection at homes (copper or fiber) is going to be mainly for broadband (data and Internet). Therefore, as some of you have mentioned, IMS will have its main applications and advantages in the mobile area. If the voice is VoBB, still the application of soft phone or SIP phone will have its requirement of being wireless (femto cells, wireless phones (wifi) etc.). No one will use a "fixed" phone.

Going for IMS is debatable. Some differentiate NGN form IMS. But for me, IMS is the new control part of the NGN (the so called "NGN" control is within the soft switch). Voice is obviously one of the services. But IMS will enable lot of other services/applications. But the following points should be noted;

1) Currently the end devises (SIP based) are expensive than traditional POTS phones and IMS solution is expensive compared to the so called " NGN" solution. So we have a CAPEX involvement.
2) Then, given the list of new services that IMS going to enable, if we are unable to sell them, then we'll not be able to get a revenue/profit.

Looking at the case studies and examples, where services providers have implemented IMS or start implementing, most of them are in developed countries, where people have more buying power and the GDP is high. Most off the developing countries will have to think twice about the 1) and 2) above. It's look like for most of the developing countries, IMS is not for today, but for the future. Exactly, when? We'll have to wait and see.

Going for IMS is therefore, more a business decision than technical.

It's very important to understand what is hype and what is reality. In most of the cases the technology creates hype. But businesses are real. At the end of the day everything should map in to $$. If there's no business case, it does not matter if it's IMS or anything else.

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[Tom Nolle Public]

The numbers are overall (voice/data/video), and none of the operators believe that volume is making up for loss; in fact the marginal revenue per bit at higher bandwidths is lower than the average number.  Also, core revenue per bit is a hundredth of access revenue per bit.

 

Tom

 

---

From: Jeroen van Bemmel [mailto:jbe...@zonnet.nl]
Sent: Monday, February 16, 2009 1:31 PM
To: Tom Nolle Public
Cc: 'Frederico Gonçalves'; imsg...@imsforum.org
Subject: Re: [IMS Group] Updates on IMS business case

 

Tom,

Are the figures you quote here revenue per bit for voice only, or data? And do they take traffic growth into account? (i.e. if revenu/bit is declining but traffic is growing, the net result could still be viable business...)

Regards,
Jeroen

Tom Nolle Public wrote:

[Tom Nolle Public]

To my recollection all of the IMS ones I’ve seen are connected to the Internet, but none of them provide QoS for Internet services.  There wouldn’t be much of a model for 3G data or content service without Internet access.  IMS does provide QoS “on-net” and (sometimes) between parties, but the ones I’ve seen have not provided for data or content QoS across operator boundaries as yet.

 

Tom

 

---

From: Jeroen van Bemmel [mailto:jbe...@zonnet.nl]
Sent: Tuesday, February 17, 2009 4:53 PM
To: Tom Nolle Public
Cc: 'Banibrata Dutta'; 'Frederico Gonçalves'; imsg...@imsforum.org
Subject: Re: [IMS Group] Updates on IMS business case

 

Tom,

How many IMS deployments that you are aware of, are connected to the Internet?

IMS has QoS mechanisms built-in by design, so end-users that pay for IMS-enabled services also pay for the QoS (-mechanisms) that comes with them. Perhaps the answer is that end-users will pay for QoS as long as it's "bundled" with a service they're willing to pay for.

Once providers start interconnecting their IMS networks, the question is whether they will use dedicated connections for that, or regular IP routes across their existing Internet.peering links

Regards,
Jeroen

Tom Nolle Public wrote:

I agree with some of your points, Jeroen, but it’s been my experience that how much QoS is managed, if any, is highly variable by ISP and by market area.  In many cases, the QoS management is really partitioning the access network completely, which is very different from QoS control at an application or service level.  In all cases that I am aware of, these mechanisms stop at a provider boundary, so I can’t agree that we have QoS on the Internet today.  We have some QoS in Internet access through partitioning, and we have some IP networks used for business service that have QoS, but they aren’t part of the Internet.  It’s my view that extending QoS across the Internet would be very, very, different in both business and technical terms.

 

Tom

 

---

From: Jeroen van Bemmel [mailto:jbe...@zonnet.nl]
Sent: Tuesday, February 17, 2009 4:07 PM
To: Tom Nolle Public
Cc: 'Banibrata Dutta'; 'Frederico Gonçalves'; imsg...@imsforum.org
Subject: Re: [IMS Group] Updates on IMS business case

 

Tom,

I would argue that there are in fact QoS mechanisms being applied to the bit pipes today. Perhaps not at the Internet interconnect points, but for sure in the access networks, up to and including the IP edges of the ISPs. Access providers separate the Internet traffic from Voip traffic, using different VCs or VLANs for example, and apply different scheduling mechanisms / priorities to those logically separated streams.

ISPs also offer different over-subscription ratios for Internet access, for example 1:1 for business Internet (i.e. more constant, guaranteed rate) and 1:20 for consumers (cheaper but dependent on time-of-day your mileage may vary). So between different packages / market segments, QoS for Internet services is already different today.

Google has recently proposed to several ISPs to install content caches in their networks, for YouTube traffic amongst others. While you could argue that this is not a QoS mechanism, the net result would be that subscribers would have a different (better) experience for these Google services, versus similar services from other Internet parties. In other words, the QoE would be affected (in my view this violates the very "net neutrality" principles Google so verbosely supports)

Lastly, many companies provide VPN access to their intranet across the Internet. The strength of security mechanisms being applied for such tunnels varies. Again perhaps not what most people would call "QoS differentiation", but in essence a special path is being setup with different (stronger) security properties for the packets following it. VPN technology is a valuable commodity for enterprises if ever I saw one.

By extrapolation, it is but a small step to extend these existing practices to also include different QoS for different applications across the Internet. Low latency paths is one example, low packet loss probability could be another. Bandwidth management in general is already a common practice.

In summary, we do have QoS or better "QoE-affecting" mechanisms on the Internet, and they are in active use today. Nonetheless, I'll agree that most traffic is still best effort, and the question is if anyone (end-user or provider) is willing to pay a premium for "beyond best effort".

Regards,
Jeroen

Tom Nolle Public wrote:

I agree that it is really about QoE, but I'd submit that this is an example

of an old economic principle called "marginal utility"

(http://en.wikipedia.org/wiki/Marginal_utility)

If you ask somebody if they'd like more peanuts in their bag, they say "Yes"

until you tell them they have to pay for it.  When you set a price, they

measure the marginal utility of the increase against the price increase to

decide.  Thus, it is not necessarily true that a given user would find

priority handling "valuable" in a marginal utility sense.  The marginal

utility sets a willingness to pay, and the willingness to pay sets a cap on

investment that can be made to support the concept you're trying.  If you

can't fund the change for the incremental payment, then the idea won't fly

financially.

The Internet is the perfect test bed for the economic future of

communications.  For a full twenty years, people have known that the

Internet was best-efforts.  For at least 15 years, the technology to make

QoS work has been available.  For at least 10 years the business model

needed to deploy that technology has been known.  We don't have QoS on the

Internet.  We have social networking, Twitter, streaming video, IM, and a

bunch of things but not QoS.  My theory:  We don't need it.  If we could

prove in QoS as a valuable commodity we'd have it already.  The Internet's

lack of QoS proves that the marginal utility of QoS is too low.

Tom

-----Original Message-----

From: jbe...@zonnet.nl [mailto:jbe...@zonnet.nl] 

Sent: Tuesday, February 17, 2009 11:38 AM

To: Tom Nolle Public

Cc: 'Banibrata Dutta'; 'Frederico Gonçalves'; imsg...@imsforum.org

Subject: RE: [IMS Group] Updates on IMS business case

Tom,

I think it fully depends on the operator offering QoS in such a way 

that it clearly improves the user experience, i.e. in a way that is 

relevant to the user. For example, an ISP could offer a premium 

"Internet gaming" subscription and provide low-latency paths to popular 

gaming servers, including packet differentiation on the access line. If 

users can try-and-buy such a proposition and notice that they have an 

advantage in their game (e.g. better responsiveness), I believe there 

would be a willingness to pay.

The problem is that this is hard to proof using only paper/web 

research, it would probably require at least a pilot project.

Regards,

Jeroen

Citeren Tom Nolle Public <tno...@cimicorp.com>:

In theory, QoS is a differentiator just as anything that’s “different” can

be.  There are two problems with QoS, though, apart from the difficulties

in

making it work across provider boundaries.  The first one is that the

Internet is the world’s largest pool of connectivity, and it doesn’t have

QoS.  That encourages application-builders to create models that are not

highly dependent on QoS.  An example is a streaming video model that

pre-buffers material to ride out variations.  Thus, “best-efforts” becomes

good enough by design.  The second problem is that even where QoS could be

valuable, it may not be valuable enough.  Users will always look at

incremental cost, and if you ask someone to pay for premium connectivity

their first question is “how much better is it and do I care?”.  Just as

users won’t pay proportionally for more capacity, there is no research I

think is credible that suggests they’d pay proportionally for QoS.

Tom

 _____

From: Banibrata Dutta [mailto:banibra...@gmail.com]

Sent: Tuesday, February 17, 2009 12:29 AM

To: Tom Nolle Public

Cc: Jeroen van Bemmel; Frederico Gonçalves; imsg...@imsforum.org

Subject: Re: [IMS Group] Updates on IMS business case

Slightly OT (but not completely).

QoS has been undermined a couple of times in the last couple of days on

this

list, but isn't QoS a major differentiator in terms of what premium an

Access bit-pipe provider may charge over what may be stock-Utility

bit-pipe,

setting the basic minimum level / quality of service ? The QoS is not in

the

Quality of pipe, but overall quality of the user experience, which spans

Customer-care, technical support, set-up/fix times, responsiveness,

billing

etc. Of course, the regions where that basic minimum level of QoS is quite

high, charging a premium for anything better may be too costly.

And doesn't that extend to Quality of user-experience when we talking of

Services other than just plain call completion ? IMHO, this extends to a

realm where IMS _can_ play a _big_ role, lack of standardization on

user-experience aspects. This is like have an excellent RCT

user-experience

with Operator-A, who then frustrates me with their erratic and

inconsistent

billing. Now if I move to Operator-B, their "completely new and different"

RCT user-experience might put me off. For enterprise applications, it'd

mean, re-training my staff to the new user-experience as well.

On Tue, Feb 17, 2009 at 12:27 AM, Tom Nolle Public <tno...@cimicorp.com>

wrote:

The numbers are overall (voice/data/video), and none of the operators

believe that volume is making up for loss; in fact the marginal revenue

per

bit at higher bandwidths is lower than the average number.  Also, core

revenue per bit is a hundredth of access revenue per bit.

Tom

 _____

From: Jeroen van Bemmel [mailto:jbe...@zonnet.nl]

From: imsgroup...@imsforum.org [mailto:imsgroup...@imsforum.org]

1.

Tom Nolle

<http://www.linkedin.com/profile?viewProfile=&key=19120228&authToken=eP36&au

thType=name&goback=%2Eanh_3058>

President of CIMI Corp and Chief Strategist at ExperiaSphere

IMS would likely be a part of any near-term 4G deployment, in my view,

simply because it's the only proven platform for PSTN-like services over

IP.

If you have circuit-switched voice options for mobile you don't need IMS,

so

the most likely determinant in IMS's future would be the pace of 4G

rollout.

Slow and it's likely other applications than voice would be revenue

drivers,

and voice might then be proven out over some other mechanism (P4P?). Fast

and IMS is the only game in town. IMS could improve its future by

accelerating some of the changes that are implied in the latest ITU

visions.

Tom

Posted 4 days ago | Reply Privately

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2.

Frederico Gonçalves

<http://www.linkedin.com/profile?viewProfile=&key=29152832&authToken=i6Eo&au

thType=name&goback=%2Eanh_3058>  you

Development Analyst at Venturus

Hi Tom, thanks for your comments. I agree with your position regarding IMS

for PSTN like services, but IMS also brings the promisse for new rich

multimedia services that could increase the operators revenue.

Besides VoIP services, do you see new promissing multimedia services that

rely on IMS (and that would not succed to be implemented without it)?

Could you share your vision for IPTV, video sharing, etc. over IMS? Is

there

other strong revenue scenarios for operators based on IMS?

Thanks a lot for your help, others feel free to join the discussion.

Rgds,

Frederico

Posted 4 days ago | Delete comment

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29080&commentID=1689870&goback=%2Eanh_3058%2Eand_3058_1429080_*2_1>

3.

Gilles Chenu

<http://www.linkedin.com/profile?viewProfile=&key=17188851&authToken=l7f0&au

thType=name&goback=%2Eanh_3058>

senior consultant at Neotilus

Hi,

I don't think that one can create through IMS a single-device-access

service

which could not be done on another solution in a way or another.

I see IMS as a way to globalize and spread services accross various

networks/domains (PSTNs, Mobile phone networks, VoIP networks, ...) which

can use different protocols and different security rules.

I believe IMS can play for the service community the same role english

played for global communications, a mean of communication that everyone

can

understand and use to communicate with people from various cultures. As it

has been the case for English, IMS won't replace the existing service

networks, but provide a gateway between them, allowing to spread services

among users of multiple networks/domains instead of a single one, while

leaving the possibility to implement services dedicated to a particular

network.

Basically, as stated in an other discussion, IMS is a big part of the

anywhere/anytime vision, and I believe that in order to create a service

that explicitly requires IMS, one must think about cross-network/domain

services.

Please feel free to share your views on this,

Gilles

Posted 4 days ago | Reply Privately

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88851&groupID=3058&goback=%2Eanh_3058%2Eand_3058_1429080_*2_1>

4.

Tom Nolle

<http://www.linkedin.com/profile?viewProfile=&key=19120228&authToken=eP36&au

thType=name&goback=%2Eanh_3058>

<http://www.linkedin.com/groupMsg?displayCreate=&contentType=MEBC&connId=191

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5.

Manuel Vexler

<http://www.linkedin.com/profile?viewProfile=&key=150647&authToken=NpJp&auth

Type=name&goback=%2Eanh_3058>

CEO at Vivaja Technologies

Migration, evolution, overlay. These are the key words to the way business

planning is applied (i.e. driven by network and service economics). Hence

is

natural to start with major current or promising revenue generators; that

is

VoIP today. Once IMS is included in the network, the question will become

how new services will be rolled out. If the new service can justify a new

architecture than IMS will become legacy...otherwise will be part of an

interworking solution, giving us one more step toward converged services.

Manuel

Posted 3 days ago | Reply Privately

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6.

Frederico Gonçalves

<http://www.linkedin.com/profile?viewProfile=&key=29152832&authToken=i6Eo&au

thType=name&goback=%2Eanh_3058>  you

<http://www.linkedin.com/groupAnswers?deleteAnswer=&gid=3058&discussionID=14

29080&commentID=1697023&goback=%2Eanh_3058%2Eand_3058_1429080_*2_1>

7.

Gilles Chenu

<http://www.linkedin.com/profile?viewProfile=&key=17188851&authToken=l7f0&au

thType=name&goback=%2Eanh_3058>

senior consultant at Neotilus

Hi Frederico,

concerning the answer to your last questions, french mobile operators are

split upon it. Orange clearly does not want to be relegated to a simple

bit-pipe, and it seems to be the same with SFR. The last operator is still

waiting to see how things develop, fearing that microsoft or google may

deploy their own service platform against which they could not compete.

Gilles

Posted 3 days ago | Reply Privately

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88851&groupID=3058&goback=%2Eanh_3058%2Eand_3058_1429080_*2_1>

8.

Jeroen Van Bemmel

<http://www.linkedin.com/profile?viewProfile=&key=15640691&authToken=Uj2U&au

thType=name&goback=%2Eanh_3058>

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regards,

Banibrata

http://www.linkedin.com/in/bdutta

[Sergio J. Castro]

Hello Anuradha, You bring a very interesting point that is in most instances overlooked by the majority and that is the digital gap between develop and underdeveloped market. Obviously in poor countries where the average people can't afford all the goody applications it won't make much sense for the operators to offer them. But considering that not all underdeveloped countries are equal and that within them are levels as well, there is the roaming business to be consider, a way to boost up tourism is to offer  visitors the applications that they have at home and maybe more, so a reliable network is needed. Some of the Caribbean Islands are doing this, no necessarily with IMS but that could be the next step. Regards -- Sergio J. Castro 1.619.227.8761 --- On Sun, 2/15/09, Anuradha Udunuwara <udun...@gmail.com> wrote:

From: Anuradha Udunuwara <udun...@gmail.com> Subject: Re: [IMS Group] Updates on IMS business case

To: "Frederico Gonçalves" <frederico...@gmail.com> Cc: imsg...@imsforum.org Date: Sunday, February 15, 2009, 9:56 PM

The future voice communication is going to be wireless, mainly due to its convenience. The wired connection at homes (copper or fiber) is going to be mainly for broadband (data and Internet). Therefore, as some of you have mentioned, IMS will have its main applications and advantages in the mobile area. If the voice is VoBB, still the application of soft phone or SIP phone will have its requirement of being wireless (femto cells, wireless phones (wifi) etc.). No one will use a "fixed" phone. Going for IMS is debatable. Some differentiate NGN form IMS. But for me, IMS is the new control part of the NGN (the so called "NGN" control is within the soft switch). Voice is obviously one of the services. But IMS will enable lot of other services/applications. But the following points should be noted; 1) Currently the end devises (SIP based) are expensive than traditional POTS phones and IMS solution is expensive compared to the so called " NGN" solution. So we have a CAPEX involvement. 2) Then, given the list of new services that IMS going to enable, if we are unable to sell them, then we'll not be able to get a revenue/profit. Looking at the case studies and examples, where services providers have implemented IMS or start implementing, most of them are in developed countries, where people have more buying power and the GDP is high. Most off the developing countries will have to think twice about the 1) and 2) above. It's look like for most of the developing countries, IMS is not for today, but for the future. Exactly, when? We'll have to wait and see. Going for IMS is therefore, more a business decision than technical. It's very important to understand what is hype and what is reality. In most of the cases the technology creates hype. But businesses are real. At the end of the day everything should map in to $$. If there's no business case, it does not matter if it's IMS or anything else.

On Sun, Feb 15, 2009 at 10:10 PM, Frederico Gonçalves <frederico...@gmail.com> wrote:

Updates on the IMS business case Most IMS reference papers and books lists many benefits from IMS deployment: QoS, Flexible Charging, Open APIs, Short time to marked, etc. However the carriers are still relutant to go for IMS, what probably means that the theory still did not convince them about IMS. The applications developed so far actually enforces the operators relutance, since no killer IMS application appeared until now...even worse, all applications that are being developed as demos and trials for IMS seems to be also viable in current networks, using regular data accesses. On the other hand, the mobile sector seems to have taken a decision to go to Internet based platforms, with big players (like Motorola, Sony Ericsson, HTC and others) going towards Google operating system and Internet applications that don't seem to need IMS at all (and also won't wait for IMS to become a reality). I would appreciate if you could share your experience and vision for IMS in this context. Thanks a lot. Posted 4 days ago Comments (8)

Tom Nolle

President of CIMI Corp and Chief Strategist at ExperiaSphere

IMS would likely be a part of any near-term 4G deployment, in my view, simply because it's the only proven platform for PSTN-like services over IP. If you have circuit-switched voice options for mobile you don't need IMS, so the most likely determinant in IMS's future would be the pace of 4G rollout. Slow and it's likely other applications than voice would be revenue drivers, and voice might then be proven out over some other mechanism (P4P?). Fast and IMS is the only game in town. IMS could improve its future by accelerating some of the changes that are implied in the latest ITU visions. Tom Posted 4 days ago | Reply Privately

Frederico Gonçalves Development Analyst at Venturus

Hi Tom, thanks for your comments. I agree with your position regarding IMS for PSTN like services, but IMS also brings the promisse for new rich multimedia services that could increase the operators revenue. Besides VoIP services, do you see new promissing multimedia services that rely on IMS (and that would not succed to be implemented without it)? Could you share your vision for IPTV, video sharing, etc. over IMS? Is there other strong revenue scenarios for operators based on IMS? Thanks a lot for your help, others feel free to join the discussion. Rgds, Frederico Posted 4 days ago | Delete comment

Gilles Chenu senior consultant at Neotilus

Hi, I don't think that one can create through IMS a single-device-access service which could not be done on another solution in a way or another. I see IMS as a way to globalize and spread services accross various networks/domains (PSTNs, Mobile phone networks, VoIP networks, ...) which can use different protocols and different security rules. I believe IMS can play for the service community the same role english played for global communications, a mean of communication that everyone can understand and use to communicate with people from various cultures. As it has been the case for English, IMS won't replace the existing service networks, but provide a gateway between them, allowing to spread services among users of multiple networks/domains instead of a single one, while leaving the possibility to implement services dedicated to a particular network. Basically, as stated in an other discussion, IMS is a big part of the anywhere/anytime vision, and I believe that in order to create a service that explicitly requires IMS, one must think about cross-network/domain services. Please feel free to share your views on this, Gilles Posted 4 days ago | Reply Privately

Tom Nolle

President of CIMI Corp and Chief Strategist at ExperiaSphere

I think there are challenges with IMS beyond basic voice services. The problem is that the Internet has defined a very effective model for content delivery, application access, etc. and that model is not based on IMS nor are its protocols particularly compatible with SIP sessions. I agree that IMS has to find value beyond voice, but I think that can be done only by working through some changes in IMS approach. The ITU seems to be favoring the notion of having IMS Service Control coexist with parallel IPTV and other Service Control frameworks, which I think would end up relegating IMS to the pure voice side of the picture, which makes it less relevant every year. It would be more constructive for IMS to revisit Service Control and generalize it to facilitate sevice relationships using protocols other than SIP. The cross-domain aspects of IMS are potentially valuable to be sure, but I think a general approach to syndication of service features (which is underway in a couple of standards teams already) would likely resolve that problem at a higher level. That's important because as long as you have to provide Internet access to mobile users you have to compete with the Web's mechanism for delivering content and even creating voice services (P2P). SIP/IMS is a decent strategy for any pairwise communication service--party to party. It's far less valuable for party-to-experience connections. Posted 3 days ago | Reply Privately

Manuel Vexler CEO at Vivaja Technologies

Migration, evolution, overlay. These are the key words to the way business planning is applied (i.e. driven by network and service economics). Hence is natural to start with major current or promising revenue generators; that is VoIP today. Once IMS is included in the network, the question will become how new services will be rolled out. If the new service can justify a new architecture than IMS will become legacy...otherwise will be part of an interworking solution, giving us one more step toward converged services. Manuel Posted 3 days ago | Reply Privately

Frederico Gonçalves Development Analyst at Venturus

Hi everyone, thanks once more for your contribution. Trying to sumarize, please feel free to add comments or correct me: PROS: IMS is a key solution for VoIP or PSTN like services CONS: however it's also clear that the revenues on regular voice communication services are becoming less atractive to operators. PROS: IMS intends to bring IP multimedia services to the mobile arena, using standard protocols and APIs to reduce time to market, increase number of services and, finally, increase operators revenue CONS: Most services planed for IMS can be deployed on current networks. The Internet comes in this scenario as a challenge since it is a live network with a very agressive business model. PROS: IMS seems to have an important role in the convergence of services for different networks and domains, such as VoIP, IPTV, Internet services and others. CONS: other service control frameworks, such as IPTV, coexist with IMS. This may relegate IMS to voice based services once more. Besides that if most services are internet based, and considering the incresing internet ubiquity, IMS may also not be vital for service convergence. The question I would like to raise now is: In such a unclear business model and a clear competition from Internet, would the operators eventually go towards a simpler bit-pipe model offering IP based access (cable and over the air), leaving services to other companies in a open Internet arena? Does it sound possible or is it just not feasible (and maybe even crazy!) at all? Thanks in advance, Frederico Posted 3 days ago | Delete comment

Gilles Chenu senior consultant at Neotilus

Hi Frederico, concerning the answer to your last questions, french mobile operators are split upon it. Orange clearly does not want to be relegated to a simple bit-pipe, and it seems to be the same with SFR. The last operator is still waiting to see how things develop, fearing that microsoft or google may deploy their own service platform against which they could not compete. Gilles Posted 3 days ago | Reply Privately

Jeroen Van Bemmel

Business Development manager at Alcatel-Lucent

There is great value in being a bit pipe provider, because your users depend on you for vital information and entertainment each and every day. You are therefore very relevant to them. Internet players, or "over-the-top" players, attract the attention of the same users. As a result, the users no longer see the bit pipe, because their attention is drawn by the content. The good news is that these two models can coexist: attention is what advertisers pay for, and even though the user doesn't think about the bit pipe below, they still pay for it every month. There is no fundamental reason why operators couldn't do both, in fact many are trying to move into ad-funded models/eco-systems. For most, it almost seems like it is not in their "nature" (some say "core business") to have an advertising based model. For sure in terms of revenue, bit pipes are still king. In most (all?) cases, IMS is deployed using a traditional telecom business model (subscription and usage fees). But subscribers don't pay for "IMS" (they don't even know what it means), they pay for the services delivered/enabled by IMS. So "the IMS business case" does not exist. In my view it should be built as a statistical mix of business cases for individual end-2-end services that subscribers would pay for.

_______________________________________________ IMSgroup mailing list IMSg...@imsforum.org http://lists.imsforum.org/mailman/listinfo/imsgroup

-----Inline Attachment Follows-----

[Banibrata Dutta]

Slightly OT (but not completely).

QoS has been undermined a couple of times in the last couple of days on this list, but isn't QoS a major differentiator in terms of what premium an Access bit-pipe provider may charge over what may be stock-Utility bit-pipe, setting the basic minimum level / quality of service ? The QoS is not in the Quality of pipe, but overall quality of the user experience, which spans Customer-care, technical support, set-up/fix times, responsiveness, billing etc. Of course, the regions where that basic minimum level of QoS is quite high, charging a premium for anything better may be too costly.

And doesn't that extend to Quality of user-experience when we talking of Services other than just plain call completion ? IMHO, this extends to a realm where IMS _can_ play a _big_ role, lack of standardization on user-experience aspects. This is like have an excellent RCT user-experience with Operator-A, who then frustrates me with their erratic and inconsistent billing. Now if I move to Operator-B, their "completely new and different" RCT user-experience might put me off. For enterprise applications, it'd mean, re-training my staff to the new user-experience as well.

On Tue, Feb 17, 2009 at 12:27 AM, Tom Nolle Public <tno...@cimicorp.com> wrote:

[jbe...@zonnet.nl]

Adrian,

Interesting graphs. However, I personally believe that people accept
this _because_ those services are free. If you're not paying for it,
you should be thankful for every minute of uptime you get. Of course
they will be very forgiving!

In other words, this is by no means proof that QoS won't come to a
broadband line near you. If anything, it shows that you need QoS in
order to build a service that people are willing to pay for - poor
quality they can clearly get for free

Regards,
Jeroen

Citeren Adrian Georgescu <a...@ag-projects.com>:

> Yes indeed. To see that waiting for QoS is futile read here:
>
> http://gigaom.com/2009/02/18/when-it-comes-to-social-networks-uptime-doesnt-matter/
>
> If nobody cares, nobody will pay for it either. The Internet works
> good enough for its purpose and is customer perception of quality
> that matters rather than network quality measured by ***** times
> nines.
>
> Adrian

>
>
> On Feb 17, 2009, at 11:26 PM, Tom Nolle Public wrote:
>
>> To my recollection all of the IMS ones I've seen are connected to
>> the Internet, but none of them provide QoS for Internet services.
>> There wouldn't be much of a model for 3G data or content service
>> without Internet access. IMS does provide QoS "on-net" and
>> (sometimes) between parties, but the ones I've seen have not
>> provided for data or content QoS across operator boundaries as yet.
>>
>> Tom
>>

[Banibrata Dutta]

Infact, in support of this agrument (Jeroen), allow me to cite an example. Of course, the example probably is not representative of larger or majority demography, but proves the point that need for QoS, and appreciation of the same, willingness to pay for it, is there.

 

Example: In my area, we were struggling with the QoS of Cable-Television, which was analogue. Back then, we were paying about $3 per month, for a bunch of 120 channels, which gave us nothing but headache, forget entertainment. So, about 30 houses (roughly about at the same time), switched to DTH. The premium as we realised was well worth it. We landed up paying an initial upfront payment of about $100 (for the STB and installation), and about $8 per month for the service. Digital signal, i.e. near DVD quality was a welcome change. The company ran a decent customer-service, and this being prepaid, which could be paid online, over phone/SMS etc., it was a whole new world. Now, the old analogue Cable-TV providers have switched to digital Cable, which in terms of image quality is as good as DTH, and price per month is $4 (half of DTH), for as many channels, but switch-back to cable, has been less than 5%. It is not because of transmission QoS alone (which is at par), but the total QoE, Quality of Experience.

 

I can see this analogy bear a very close resemblence to Internet, 3G-access to it, and finally IMS (it's impacts, as seen by User). Of course, in the example able, there was something that DTH managed to exceed. It is imperative that IMS have "something" that gives it the escape-velocity, without which, it's only go up to come down soon after. IMS, as we know it, doesn't do any wonders to the voice-quality per se (compared to what Circuit Switched offers), unless of course, we start talking of using wide-band codecs (not an IMS problem), support for transport QoS (or atleast over-dimensing -- and also, not IMS problem), and IMS enabling a quintessential and truely seamless handoff (voice, video, service continuity). That's QoE largely though, not so much of QoS.

my 2 cents,

Banibrata

[Jeroen van Bemmel]

Banibrata,

Beautiful example, thanks for sharing!

IMS was originally designed for universal delivery of multi-media services, including international roaming. It still holds this promise, but it looks like we'll have to wait for LTE to see this vision fully realized. In the mean time, I would personally still recommend operators to deploy IMS for their fixed networks (to start with), such that they can build up experience on operating it. The very universality of IMS makes it different from previous technologies. Both funding decisions and operational responsibilities for IMS often don't align with traditional organizational boundaries, which means it will take several internal reorganizations to truly take advantage of IMS. All of this takes time (and a little patience).

So start now, to ensure we all get a running start on LTE tomorrow

Regards,
Jeroen

Banibrata Dutta wrote:

[Jeroen van Bemmel]

Jose,

LTE is an open standards based end-2-end all-IP architecture. To my knowledge, no service provider today has something like that deployed for 3G + DSL (existing deployments that I'm aware of are either fixed-only IMS, or use proprietary VoIP protocols for mobile such as Skype).

MSC-based architectures are closed and limited in flexibility w.r.t. externalizing and adapting service logic (often vendor specific, buried deep inside IN platforms), but indeed if all an operator wants to do is pure (corporate) voice - then this may be an option for them.

An early mover on LTE, Verizon Wireless in the US, has recently announced their IMS-based approach (see http://news.vzw.com/news/2009/02/pr2009-02-18.html - "Verizon plans to offer IMS-based IP converged applications and services on its wireless and landline broadband networks. LTE will be one of the key wireless access networks linked to the IMS technology.")

So you are right that LTE != IMS: LTE is but one of the access technologies that IMS supports.

Regards,
Jeroen

Jose M Recio wrote:

I have my doubts that the equation "LTE = IMS" will hold true.

Many service providers already offer IP-based, voice-related services, over several access networks (e.g. 3G + DSL) without IMS. If service providers find those systems are working fine, most probably they will reuse those assets for LTE subscribers.

Of course, greenfield LTE operators may start from scratch, and they will likely go down the cheapest route, for them a softswitch-like or evolved 3GPP architecture (based on very few MSC servers + gateways) may still be a very valid option for the service mix (corporate voice + internet access) that many operators think that can realistically be sold here and now.

 

About QoS: GSMA operators are setting up the legal and technical superstructure that will allow roaming to happen in a pure IP fashion (http://www.gsmworld.com/documents/packet_voice_interwork_wp.pdf). It will support security, different business models and, yes, QoS. But all those properties will apply only to applications and content residing in operator's networks. As Tom has pointed out, once the applications and content are in the Internet, QoS is lost and probably meaningless.

 

---

De: imsgroup...@imsforum.org [mailto:imsgroup...@imsforum.org] En nombre de Jeroen van Bemmel
Enviado el: viernes, 20 de febrero de 2009 22:45
Para: Banibrata Dutta
CC: imsg...@imsforum.org
Asunto: Re: [IMS Group] Updates on IMS business case

[Jeroen van Bemmel]

Tom,

IMS isn't the complete service architecture. It's called "IP Multi-Media *Sub-system*", meaning that it's part of a bigger whole. There is plenty of room left for non-IMS elements in the service architecture.
I feel that too many people treat IMS as an "all-or-nothing" option, as if IMS could be everything an operator would need to succeed. Apparently IMS marketing has been successful in this respect, but this reasoning is obviously and demonstrably flawed.

There is an aspect of timing, but in my view it mostly affects vendor pricing of certain IMS components (i.e. if voice revenues decline, then the RoI of voice-related components is lower). IMS is not only about voice, though that is the mode in which it is most commonly deployed today. Video drives 4G bandwidth usage, so one way or another IMS will stay relevant regardless of how fast voice commodotizes.

Regards,
Jeroen

Tom Nolle Public wrote:

I think the big LTE impact on IMS could come out of market timing.  IMS is favored by a move to use VoIP (SIP) versus PSTN in any kind of IP network, wireline or wireless.  Since there is no circuit-switched 4G voice option, a migration to 4G would likely make operators consider an IMS move too (as would a big push for FMC or femtocells).  The question is the timing of this move to 4G versus the timing of the decline of voice services in revenue importance.  If we were to see two or three years go by without much 4G deployment, then my view is that mobile voice pricing trends relative to mobile data and content services might start to become negative.  That would then call into question any voice-driven service architecture, including IMS.  If 4G happened quickly, then voice revenues will still dominate planners’ focus and IMS has a better chance.

 

Tom

 

---

[alan lloyd]

Hi and thanks Jose,  Jeroen,,  Its good to see investments in LTE and new services including global roaming -  I am still trying to understand what the OSS/BSS/SDP and AAA service management expectations are with these deployments?

 

Jose says: It will support security, different business models and, yes, QoS. But all those properties will apply only to applications and content residing in operator's networks.

 

Agree – and these are still very much organized around the operators business structures and (multiple) AAA  methods associated with them.

I still get three telephone bills per month (one for cable tv, one for voice and one for internet/mail) and a mine field of help desk menus. 

 

I also think that as operators move to the model where call rates/SMS and access are the basic services have reducing revenues  – the new revenue models have/will move to content delivery, parental controls, QoS based services on demand, event/presence services, games/gaming  and app subscription services… Above this are the revenues from managed private service environments for commercial/govt organisations too.

 

So for me its really hard to understand the business case for LTE or IMS unless I see the services management association with it and for that services management to be addressing the business profiles  of both the  falling revenue streams and rising revenue streams.

 

Best wishes alan

---

From: imsgroup...@imsforum.org [mailto:imsgroup...@imsforum.org] On Behalf Of Jeroen van Bemmel

Sent: Monday, March 02, 2009 7:50 AM
To: Jose M Recio

Cc: imsg...@imsforum.org
Subject: Re: [IMS Group] Updates on IMS business case

 

Jose,

snip

[Andre Torres]

Hi all,

 

Although operators are only stepping on LTE, there are interesting Wimax deployments. Wimax is open standard all-IP e2e architecture as well. Any notice on any one using IMS Core and Wimax access?

Is it a good starting point for operators or they should wait for LTE?

 

BR,

 

Andre Araujo Torres

 

Technical Sales Manager - Core Network

Huawei Technologies (Brazil) 

 

Mobile: +55 21 7685-1879

E-mail: andre....@huawei.com

---

From: Jeroen van Bemmel [mailto:jbe...@zonnet.nl]

Sent: domingo, 1 de março de 2009 17:50
To: Jose M Recio

[Jose M Recio]

Several converged operators have deployed IP-based corporate voice solutions across mobile and fixed (DSL, etc.) access, what we may call hosted IP-PBX.

If that solution works fine, why trigger an architecture overhaul for LTE subscribers? Just plug them to what basically would be the same IP-PBX, with some minor changes.

 

New (e.g. R5, R6) MSC-based architectures surely won't be as flexible as IMS, but have decreased OPEX for voice and SMS by a great amount. They are allowing offloading applications to IP-based platforms, away from IN, basically IP-PBX on steroids, again with no IMS.

 

Not sure if that's the case for Verizon, may be they are in the situation where . Many operators made similar commitments to IMS in the past.

 

In a Mobile World Congress panel (don't remember exactly which one), somebody told openly what is more or less a hidden secret: the mobile applications that everybody is talking about (app stores, etc.) are in most cases front-ends for Web portals, away from traditional telecom architectures and session control.

 

---

De: Jeroen van Bemmel [mailto:jbe...@zonnet.nl]
Enviado el: domingo, 01 de marzo de 2009 21:50
Para: Jose M Recio
CC: 'Banibrata Dutta'; imsg...@imsforum.org

[Alfonso Fiore]

is it possible to charge end-users for IMS additional services?

I was reading past posts, and this argument has been touched several times, but I would like to make this the key topic: is it possible to charge end-users for IMS additional services?

Someone, few weeks ago, correctly pointed out that end-users are not interested in paying what they can get for free, since current IMS applications are copies of running web 2.0 services (IM, presence, video sharing, etc).

But then again, end-user can use these internet applications things as long as their phones allow them to do them (e.g. with proper clients). If you read in the news what happened between Nokia and Orange and O2 over the Skype client, you'll see this "war" is far from over.
I don't have statistics, but I recall I once read figures that say that a very small percentage of users install additional software on their phones.

If an IMS rich client would be embedded on a phone, rather than a Skype client, something new can happen.

As others noticed more than once in this group, and as end-user I totally agree, users won't be interested in paying for services they receive for free on the internet.

So where do we go from here?

I see the following options (I'd love your comments):

- IMS will be seen as an investment to reduce churn. It will be offered for free to create stronger ties between operator and end users

- IMS will be paid by the fix network (I recall months ago we already reach the conclusion that there is a solid business case of long term OPEX reduction in migrating fixed voice to IMS) and the mobile users will benefit for it. By the way, is there any figure of which percentage of fixed users in developed countries are using VoIP? Which % is using SIP? Which % is using IMS?

- some Clever Guy will have a Smart Idea of a killer application that will have an easy time being accepted (and paid) by end-users (remember that the end-users who think you are crazy to ask them money for IM on a mobile phone are the same end-users happily paying billions for SMSes)

- some other Clever Guy will find a smart way to create advertised IMS applications for phones that will bring revenues to operators. About this point, I always fail to understand why operators don't seem so active in the following "equation": we compete against web 2.0 services => we are competing against google => google revenues are based on advertisement => let's invest in this direction

alfonso

2009/2/15 Frederico Gonçalves <frederico...@gmail.com>

[Tom Nolle Public]

You have a lot of interesting stuff here, but we have to be careful to separate IMS benefits into categories; things only attributable to IMS and things that IMS can do but can also be done other ways.

 

There is no question that reducing churn is important.  There is no question that linking voice over IP to wireline is important.  There is no question that supporting any killer apps that arise is important.  There is also no question that you could assert that IMS could provide these things and that IMS is “good” but that’s not the issue.  The question is whether you need IMS to do them

 

Reducing churn is really a matter of providing users something they can’t get elsewhere.  It’s true that IMS-based services could be different from over-the-top services because the operator controls the applications, but there is nothing to prevent an OTT player from simply duplicating what IMS is providing.  Skype is a good example; you can call without IMS using Skype.  Is it as “good”?  No, but it’s free.  There isn’t a clear differentiator here, so I don’t think you can say that IMS would automatically reduce churn.  In fact, if IMS implementations reduced service velocity to deploy new things, IMS could create churn.

 

Interworking with wireline is just a PSTN gateway function; you don’t need IMS to do it and it’s hard to see what incremental value IMS would bring to that specific thing.  I see no benefit here that we can really defend.

 

Killer application support?  We have created most if not all the “killer applications” around IMS and not on it.  Google has Latitude, we have local search, we have GPS location finding, we can shop and chat and email and none of this is done via IMS (in the overwhelming majority of the world).  We don’t know how long it would take to support a killer application with IMS, so we can’t really say IMS wouldn’t offer something, but we can’t show it would provide a benefit either.

 

Mobile users consume technology only as a means to an end.  The technology will never differentiate, only the services, and the services today seem to be migrating to a web and smartphone framework, away from what IMS is targeted at providing.

 

This doesn’t mean that IMS offers no benefits; it’s an architecture that insures settlement so mobile operators are willing to allow roaming.  It’s an architecture that can control QoS.  It provides authoritative caller numbers for regulatory reasons and for public safety.  But before we can say these benefits justify IMS, we have to know what providing these things outside IMS would cost, and whether the things outside IMS that do provide them might also then offer the user benefits we’ve described here.  It’s not an easy set of things to prove one way or the other, and I’m like pretty much everyone else in just providing my best estimate or judgment on the result.

 

Tom

 

---

From: imsgroup...@imsforum.org [mailto:imsgroup...@imsforum.org] On Behalf Of Alfonso Fiore
Sent: Wednesday, March 04, 2009 9:29 AM
To: imsg...@imsforum.org
Subject: Re: [IMS Group] Updates on IMS business case

 

is it possible to charge end-users for IMS additional services?

[Jeroen van Bemmel]

Alfonso,

If operators would bundle a pre-installed IMS client with a suitable mobile phone (well integrated), users would pay for it indirectly (as part of their monthly fee or bundle pricing).

If on the other hands Skype comes pre-installed on all Nokia's, operator loose control over this bundling, and they don't like that. Moreover, the Skype brand is associated with free calling, so it's less likely to generate revenue (because end users expect it to be free). And lastly, operators with a strong value brand of their own don't want the Skype logo on "their" phone.

Regards,
Jeroen

Alfonso Fiore wrote:

[alan lloyd]

Hi Tom , Alfonso  -  all good thoughts too and what the discussion shows that we still are not clear what IMS will do that we cant do already or could do by other means.

 

However, there are other factors which will affect the business case for (or not) IMS.  Australia for instance is a big empty country with most of us living on the bit around the edge,  and a few % of us in spots in the middle. Broadband and mobile coverage is always on the political agenda re remote towns and business, education, health, emergency and social services.  Existing transformation programs and services, well … as the result of  management changes , our national operator has come under the spotlight – in that predicted  targets have not been met.

We are also considering a new national broadband infrastructure through a consortium and we have MVNOs and other operators who lease wire and mobile capacity off the national operator.

 

With all this,  the GFC, the state of the nation and the social /online needs of our outlying communities – I think IMS wont be here for a while as it will just add complexity.. The budgets are too small and the other (social well being) demands to important.

 

As for

- some other Clever Guy will find a smart way to create advertised IMS applications for phones that will bring revenues to operators. About this point, I always fail to understand why operators don't seem so active in the following "equation": we compete against web 2.0 services => we are competing against google => google revenues are based on advertisement => let's invest in this direction

I was talking with an SMS services company the other day – they had some interesting stats  - in that we (the people)  are happy to answer a phone call,  making calls – a bit more awkward, reading SMSs fine, sending them- many think its too hard and don’t bother…    This may be generational issue but I assume a few would have stats about the hit rates of interactive advertising/purchasing on phones – and that may say   “Our fingers are too big to deal with it” !   ..And BTW  -  providing that service  could mean that customer centric,  self care, personalization, opt in - preferences and entitlements to be placed  in the HSS AAA system J   That one must be the story of my life !! J

 

Best wishes alan

 

---

[Tom Nolle Public]

I want to make a brief point on the advertising side.  The world’s total adspend is about a sixth of its total communications spend, and so at the current capex-to-sales ratio we could not fund the network capital programs of today if networking too ALL of advertising revenues.  There is no indication that advertising spending rises more than GDP, so we can’t look for enough growth there either.  The simple truth is that we have to find services people will pay for, meaning that we have to turn an appetite for free OTT stuff into paid services.  An architecture to create a model to do that has to have the business elements like settlement that IMS has, but it also has to be the best platform to create the stuff people want to consume.

 

Tom

 

---

[George Kongalath]

Hi

I have been watching all these threads - and I would like to bring up a simple question about IMS and the business case. The question is - with the strong push for DLNA especially on devices in the house, it forces IMS to terminate at the entrance of the house. If IMS terminates at the entrance - what business case is there with respect to any service?

Regards

G

 

 

---

From: imsgroup...@imsforum.org [mailto:imsgroup...@imsforum.org] On Behalf Of Alfonso Fiore

Sent: March 4, 2009 3:29 PM

To: imsg...@imsforum.org
Subject: Re: [IMS Group] Updates on IMS business case

[Tom Nolle Public]

My numbers say that 78% of all the money paid for communications services worldwide is for a service package and only 22% for “incident” services.  Over the current decade, that’s shifted from a 65% to 35% balance, largely because people have stopped paying for LD calling and are increasingly not paying incrementally on mobile.  The pattern is pretty much a classical commoditization-under-price-competition curve.  Where feature differentiation no longer works, price differentiation is the only strategy, and as prices fall it’s critical to sustain the customer base because acquisition of a customer is too expensive.

 

The reason that the OTT players like Google can be successful is their cost-avoidance model combined with the fact that in terms of the real industry they’re small fry.  Google’s revenues are less than those of a solid Tier Two; even tens of billions of dollars aren’t enormous compared to a big Tier One, but the whole online ad market is measured in tens of billions.

 

You are right in staying that all services can’t be free, and in fact even our current level of “free-ness” is IMHO not sustainable.  I’m not arguing for the notion that we need to adopt a free model or that OTT players are “right” in their business model, or that they can sustain it.  My point is that if you look at any communications service, it has a period in which it sustains high profits and enjoys YoY revenue growth, followed by a period where it commoditizes.  That latter period inevitably ends with the service being unable to sustain separate service infrastructure, so it’s subsumed into something else.  We used to pay for email; no more.

 

The challenge for the operators is that the OTT guys have been very agile and capable in the service conceptualization and creation sense.  Why did Google launch Latitude instead of a telco?  The high inertia of the telco service process combines with the agility of the OTT guys to mean that the OTT players get all the high-margin opportunities in their emergence phase.  That they can offer them “free” for ad sponsorship only exacerbates the situation.  This poisons the margin-rich part of the play and leaves the industry in the commoditization phase.

 

I understand the mechanisms of IMS could in theory create custom services for operators, but I submit that the processes would also be available today without IMS and that the operators have not been able to capitalize on them; I return again to the Latitude example.  We have in IMS an architecture that can create a stable service framework, but we must also have a highly agile service framework.  My experience is that IMS proponents want IMS accepted as a given, want us to wait while standards bodies or provider deliberations bring the service dimension to the picture in a specific enough way to sustain a market.  Whether I wait or not, Google and the others surely will not, and you can’t win against an opponent if you let them seize all the key spaces before you even advance.  It’s not enough to say that IMS solves part of the problem and that the solution to non-session services will come along in some other “subsystem”.  Delayed gratification of user demand means somebody else gets to gratify it.

 

Tom

 

---

From: Alfonso Fiore [mailto:alfons...@gmail.com]
Sent: Thursday, March 05, 2009 8:26 AM
To: imsg...@imsforum.org
Cc: Tom Nolle Public
Subject: Re: [IMS Group] Updates on IMS business case

 

Very interesting data, thank you Tom.

I wonder: what % of  communications spending is done on bundles and how much in pay-per-item? And what is the trend or the last 5-10 years?

ISP used also to be a high revenue business, but today it's a flat bundle offer.

How can Google business model just be based on ad? Or am I hugely mistaken? Am I missing something?

With all services being free and ad-based (mail by google, im / voice / video sharing by google / skype / etc, social network by facebook, news by newspapers online, tv by official BBC youtube channels) I just don't see (yet) such service that will make users happily pay cash. Of course it's just about having the right idea. If next time I mention my Ferrari, it means I had it... ;-)

Quoting myself:

Finally, an interesting side-thing I'd like to add is that some DSL providers were successful to bail themselves out from dump-pipe state thanks to IPTV. Why? Because compared to the service the aim to beat (standard tv) they offer much more opportunities (i.e. time shift, pause live tv and so on) and on the other side given the high bandwidth and QoS requirements the same services cannot be provided by a 3rd party.

IMHO the "holy grail" is to find the correspondent service for the mobile world as IPTV was for DSL providers, answering to both criteria: being better than the service you want to compete with, being by its inner nature best server by the operator itself.

I think RCS at least might comply with the frist criteria: having a single client for your mobile and your pc, same look&feel, having interoperability with the install based (MSN, Google, Skype), is (arguably) better than running IM from within Fring on mobile and having Skype, MSN and Google Talk on my PC.

About the second criteria (kind of a stretch here): operator are in the position to demand a pre-installed deeply coupled client within mobiles. 3rd parties best bet would be an external client to be manually installed.

But of course, if we expect users to a pay-per-message model compared to free on internet, it will hardly fly.

Br,

alfonso

[David Wray]

Alfonso, I'm not saying people would use Skype over an IMS application what I am saying is that for it to have the same penetration it needs to interoperate back and forth with other systems in the same way that in the IM world there are Public IM gateways to connect enterprise Microsoft OCS clusters to public MSN and yahoo servers. Operators IMS networks need to be able to do the same to any compatible service/ device whether that be an enterprise cluster, skype, msn or another operators network not just for roaming but also for cross communication/ presence. I whole heartedly agree with your comments about the fring client and about making the phone/ network locked down to support only the operators client ( as long as it can talk to the rest of the world)

-David Wray

+447866479935

Sent from my iPhone 

On 5 Mar 2009, at 09:06, Alfonso Fiore <alfons...@gmail.com> wrote:

Hi David.

I don't agree with you.

While IMS IM _might_ not be interoperable with Skype, it certainly could. And it could be interoperable with SMS, which you cannot say about Skype, right?

If Fring can build a gateway for Skype, GTalk, MSN and God knows what, certainly anyone writing an IMS IM server could do the same.

How to convince operators this is the way forward? Simply show them figures of how SMS took off in any market when interoperability with the other operators or the rest of the world was achieved.

My work is not writing business models, but if end-users would have a single client for all kind of IM (SMS towards legacy handsets, intra-operator IM and IM towards internet) ___REASONABLY PRICED___ I'm sure they would use it.

Let's say:
- free to receive
- x cents for SMS
- x/2 cents for IM inside the operator and towards other mobile operators
- x/4 cents for IM towards internet users

Throw in some eye candy (an online repository of all sent and received msg from which it's easy to opt-out) and something that connects to facebook.
Add to this mix the good amount of "walled garden", e.g. pre-install this client and don't allow a pre-installed skype client (see what O2 and Orange said about Nokia shipping Skype clients) and you have a good cocktail. IMHO.

Br,

alfonso

On Thu, Mar 5, 2009 at 9:53 AM, David Wray <wray...@gmail.com> wrote:

The problem with all "IMS" applications is making them work cross border and cross operator. While skype allows me to make an receive presence IM voice and video to all of my freinds infrastructure independently if my phones IMS client only works on to subscribers on the same network/ infrastructure type operator services will never take off. Take for example the rapid take off of SMS vs the stillborn launch of mms.

-David Wray

+447866479935

Sent from my iPhone 

[David Wray]

The problem with all "IMS" applications is making them work cross border and cross operator. While skype allows me to make an receive presence IM voice and video to all of my freinds infrastructure independently if my phones IMS client only works on to subscribers on the same network/ infrastructure type operator services will never take off. Take for example the rapid take off of SMS vs the stillborn launch of mms.

-David Wray

+447866479935

Sent from my iPhone 

[Alfonso Fiore]

Hi Branibrata.

A quick search on internet reveals market for telecom is measured in trillions: in 2007 it passed 2 trillions and it was forecast to hit 3 trillions by 2010: http://www.telecomseurope.net/article.php?id_article=3654

For advertisement, the market was estimated to be around 80 billions in 2007 and forecast to reach 100 billions in 2012: http://www.marketresearch.com/product/display.asp?productid=2104442&g=1

So the ratio seems to be between 1/20 and 1/40...

alfonso

On Thu, Mar 5, 2009 at 3:49 PM, Banibrata Dutta <banibra...@gmail.com> wrote:

On Thu, Mar 5, 2009 at 6:34 PM, Tom Nolle Public <tno...@cimicorp.com> wrote:

I want to make a brief point on the advertising side.  The world’s total adspend is about a sixth of its total communications spend, and so at the current capex-to-sales ratio we could not fund the network capital programs of today if networking

It's one of the most amazing, powerful and compelling statements I've heard on these lines, and really puts things in a perspective -- a very clear one at that. Could you point us to some reference sources to that effect ?

too ALL of advertising revenues.  There is no indication that advertising spending rises more than GDP, so we can’t look for enough growth there either.  The simple truth is that we have to find services people will pay for, meaning that we have to turn an appetite for free OTT stuff into paid services.  An architecture to create a model to do that has to have the business elements like settlement that IMS has, but it also has to be the best platform to create the stuff people want to consume.

--

regards,
Banibrata
http://www.linkedin.com/in/bdutta

[Tom Nolle Public]

The number is just the statistics from the consensus of advertising analysts versus the same (financial analyst) numbers for all service providers.  Total adspend is about $600 billion and total services revenues for all services about $3.6 trillion.

 

---

From: Banibrata Dutta [mailto:banibra...@gmail.com]

Sent: Thursday, March 05, 2009 9:49 AM
To: Tom Nolle Public

Cc: alan....@wwite.com; Alfonso Fiore; imsg...@imsforum.org
Subject: Re: [IMS Group] Updates on IMS business case

On Thu, Mar 5, 2009 at 6:34 PM, Tom Nolle Public <tno...@cimicorp.com> wrote:

I want to make a brief point on the advertising side.  The world’s total adspend is about a sixth of its total communications spend, and so at the current capex-to-sales ratio we could not fund the network capital programs of today if networking

It's one of the most amazing, powerful and compelling statements I've heard on these lines, and really puts things in a perspective -- a very clear one at that. Could you point us to some reference sources to that effect ?

too ALL of advertising revenues.  There is no indication that advertising spending rises more than GDP, so we can’t look for enough growth there either.  The simple truth is that we have to find services people will pay for, meaning that we have to turn an appetite for free OTT stuff into paid services.  An architecture to create a model to do that has to have the business elements like settlement that IMS has, but it also has to be the best platform to create the stuff people want to consume.

--
regards,
Banibrata
http://www.linkedin.com/in/bdutta

[Masoud Loghmani]

Alfonso

I think we need to take a close look at Apple's iPhone apps store model. Apple has created a echo-system where developers have access to phone API, network data (e.g. Location), and provided a payment system, and nearly everything else a developer may need to create a new application. As a result thousands of new applications have popped up and users have adopted great many of them.
All of this with no IMS.

Apple used the web's business model to unleash creativity of the garage entrepreneurs to make money for itself and the successful winners in the game.

IMS was a great start when the Telco world (vendors as well as carriers) finally started to move from traditional and heavy Telco centric (and at best semi-open) protocols to more web-centric standards and a much flatter architecture. IMS may have taken the step to openness on the technical side, but it is on the business-model where Telcos (and their vendors/consultants, most of us on this group) seem quite unwilling to take the next step.

The only way IMS can succeed is if it copies the web model not only on the technical side, but also on the business model side. Carriers can become the enablers of all kinds of apps by creating an open oasis environment where IMS services are offered not as "killer-apps" but as "killer-APIs" and "killer-abilities", and the rest is left to developers to imagine what they can do. A few examples of these killer abilities for iPhone are its multi-touch interface and its motion sensor. Is IMS offering "killer abilities" for network-aware apps with cross-channel persistence capabilities (i.e. can I start an interaction on the office computer, continue it on the road on my mobile, and pick it up later at home from the IPTV? Does IMS make collaboration any easier?)

I see so many discussions where we are trying and trying to find a business case for IMS. IMS offers new "enablers" in an open environment for new "apps" which will be imagined by the army of entrepreneurs only if open it up to them. Again, the only way IMS can succeed if it copies the web model not only on the technical side, but also on the business model side.

Masoud Loghmani

maso...@gmail.com
(301) 873-6595

[alan lloyd]

Hi   as Tom said –

“ My experience is that IMS proponents want IMS accepted as a given, want us to wait while standards bodies or provider deliberations bring the service dimension to the picture in a specific enough way to sustain a market. “

Agree - 

And I don’t mind waiting for specification –  But I cant wait if I think the process is not working.

The existing approach of designing service infrastructure with abstract frameworks, connectivity architectures (protocol flows), reference points, standards then data drums in which someone at the end of this chain then develops  the specific data model (for that server/flow) -   IMHO has reached its use by date .   Particularly when the management and information/identity engineering related to users and services is either left out of this process or loosely specified.  That design approach to me is like designing a plane without defining how many passengers it seats or what they need when on board and how we name all the entities involved.

Such approaches are OK for back office and network functions.   But IMHO absolutely broken for complex customer facing systems.

 

In terms of vendors and operators and the online customers of operators they have demands too like low cost/risk and rapid deployment, - low cost (to the user), self care, real time, converged services and efficient help desks.. Information performance – that is I don’t wait 20 seconds to log in for “my world”,  it doesn’t mean I have to stand in the middle of a main road to get mobile reception. Or I don’t get an IVR help telling me they are busy and please wait 55 minutes! 

 

I actually look at my bills now and wonder how much of that is going in fragmented systems, staff salaries for wasted time because of the poor information performance specification for care /self care  systems -  and system designs which started with drums and boxes.

 

So I am quite happy to engineer SIP and have core event processes based on Subscribe / Notify , but I cant wait for IMS (my life is too short J)  And operators and their customers have more pressing service management and delivery issues to solve.

 

I think a bigger question is with the GFC – If as a vendor I invest in and develop IMS from what is defined (and its still a moving target) , when does the shareholder see a return?

 

What is the IMS vendor business case?

 

Best wishes alan

 

 

 

 

 

 

 

[Banibrata Dutta]

On Thu, Mar 5, 2009 at 8:41 PM, Alfonso Fiore <alfons...@gmail.com> wrote:

Hi Branibrata.

A quick search on internet reveals market for telecom is measured in trillions: in 2007 it passed 2 trillions and it was forecast to hit 3 trillions by 2010: http://www.telecomseurope.net/article.php?id_article=3654

For advertisement, the market was estimated to be around 80 billions in 2007 and forecast to reach 100 billions in 2012: http://www.marketresearch.com/product/display.asp?productid=2104442&g=1

So the ratio seems to be between 1/20 and 1/40...

 

Thank you for the links Alfonso. They are quite useful.

 

However, I was looking at data that is a bit more precise, i.e. talking in terms of global ad-spend, which then factors in things like advertiser's belief of effectiveness of advts. via Telecom companies (text, voice, video... portal space, reverse of bills, mailers etc.) as a percentage of that, then remove the comissions that aggregators, agencies etc. will charge, to find the "net" $s that Telcos can hope to get. Then compare it with the "cost" a Telco incurs to provide service including costs from spectrum acquisition, infrastructure capex / opex, marketing costs ... etc. (everything). How well those 2 compare. Is it still a 1:20 / 1:40 ratio ?

 

Now that would be some really interesting conclusion.

 

On Thu, Mar 5, 2009 at 3:49 PM, Banibrata Dutta <banibra...@gmail.com> wrote:

On Thu, Mar 5, 2009 at 6:34 PM, Tom Nolle Public <tno...@cimicorp.com> wrote:

I want to make a brief point on the advertising side.  The world’s total adspend is about a sixth of its total communications spend, and so at the current capex-to-sales ratio we could not fund the network capital programs of today if networking

It's one of the most amazing, powerful and compelling statements I've heard on these lines, and really puts things in a perspective -- a very clear one at that. Could you point us to some reference sources to that effect ?

too ALL of advertising revenues.  There is no indication that advertising spending rises more than GDP, so we can’t look for enough growth there either.  The simple truth is that we have to find services people will pay for, meaning that we have to turn an appetite for free OTT stuff into paid services.  An architecture to create a model to do that has to have the business elements like settlement that IMS has, but it also has to be the best platform to create the stuff people want to consume.

--

regards,
Banibrata
http://www.linkedin.com/in/bdutta