Convergence Contenders

The IP Multimedia Subsystem (IMS) is probably the biggest thing that didn’t happen in mobile networking this year. And, although the architecture holds great promise for the future, it’s apparent that IMS is part of a longer game for mobile operators.

This “sometime-in-the-future” schedule is at odds with the desire of some operators to launch fixed/mobile convergence services in the short term, finds the latest Unstrung Insider report: Fixed/Mobile Convergence, UMA, and IMS: An Unstrung Reality Check.

In itself this is not a problem: Many operators – even those owned by incumbent wireline providers – don’t yet want to converge wireline and wireless services. And, typically, mobile carriers don’t see IMS as being primarily about this application. Vodafone Group plc (NYSE: VOD), Telefònica Mòviles SA, Verizon Wireless, and O2 plc (NYSE/London: OOM) come to mind.

So for those operators that do want to offer convergence services, it’s a question of using the technologies that are fastest and easiest to implement and maintain, and which are stable and available today. For the most part, this means using the Unlicensed Mobile Access (UMA) architecture – a.k.a. Generic Access Network – which ports IP access networks into the mobile core. Or, in arguably more sophisticated form, it means using some kind of convergence gateway, or application server, to link the world of IP transport and session control with the world of the mobile operator.

Many of these “interim” fixed/mobile convergence solutions are provided, or at least inspired by, a raft of startups analyzed in the Insider report. Names in the frame include: Azaire Networks Inc., BridgePort Networks Inc., Convergin, Kineto Wireless Inc., NewStep Networks Inc., Outsmart Ltd., and Stoke Inc.

The report also notes that top vendors are working with these innovative startups, often covertly, to fill “pre-IMS” portfolio gaps, as demand for fixed/mobile convergence systems increases. And while it's true that many of these startup relationships remain opportunistic – with the startup often responsible for lead-generation – to judge from recent service provider news, demand from operators is clearly on the up. See for example: DT Jumps on Convergence, TI Plans Converged Services, Cable Firms, Sprint In FMC Deal, Cingular's Got Big FMC Plans, TeliaSonera Tests FMC, AT&T: We've Got FMC Too, and BT Unveils FMC Service.

Add to the above the rumors and reports that UMA launches by Cingular Wireless LLC and T-Mobile USA are imminent (probably in the first half of 2006), and it starts to add up to an important market for the world's major systems vendors, whose IMS strategies and positioning are featured in the report. Names in the frame here include Alcatel (NYSE: ALA; Paris: CGEP:PA), Ericsson AB (Nasdaq: ERICY), Lucent Technologies Inc. (NYSE: LU), Motorola Inc. (NYSE: MOT), Nokia Corp. (NYSE: NOK), and Siemens AG (NYSE: SI; Frankfurt: SIE).

Some other findings from the report:

  • Mobile operators really do want IMS, with the majority of large operators in mature markets having already selected vendors, or expecting to do so in 2006. The architecture is seen as a way to offer data services without being relegated to “bit pipe” status and to ensure a level of service quality for applications over bandwidth-constrained mobile networks.
  • IMS will typically be introduced around a set of lead services, such as push-to-share, presence, and messaging applications. In the mobile world, IMS is not yet synonymous with voice over IP – using it as a mechanism to simulate/emulate traditional phone services is an import from the wireline world that is stuck in quarantine.
  • UMA and IMS can be introduced in parallel. In this scenario, the carriers’ existing switching systems (classic MSCs or MSC Servers with media gateways) handle voice traffic, while data applications are delivered over the packet core and IP Multimedia Subsystem.
  • The immaturity of IMS is in opposition to its promise of reducing time-to-market for new services. Operators are aware they currently lack the skills, process, and knowledge required to maximize a reurn on investment in IMS systems.
It is also legitimate to question what exactly operators are really hoping to achieve with these early fixed/mobile convergence services. One argument is that, for now, convergence is more about selling bundles, reducing churn, and infusing brands with a sense of innovation and “cutting-edgeness” than a fundamental change in the way services are used and delivered. Pulling minutes over your home wireless LAN is almost the last thing on the operators' agenda.

— Gabriel Brown, Chief Analyst, Unstrung Insider

The report, Fixed/Mobile Convergence, UMA, and IMS: An Unstrung Reality Check, is available as part of an annual subscription (12 monthly issues) to Unstrung Insider, priced at $1,350. Individual reports are available for $900. To subscribe, please visit: www.unstrung.com/insider.

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