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Can You Justify FMC, and the IMS Investment?

Some industry analysts are critical of most service provider's vision of how they will create new value added offerings from the potential integration of wireline and wireless services. They don't question the basic intent, but they do worry about grand implementation plans that require a huge investment in IMS platforms.

However, according to Pyramid Research, as a fixed-mobile convergence (FMC) and SIP application enabler, IMS is the best existing solution on a carrier’s migration path to all-IP. Despite its high cost, IMS has a number of valuable advantages that justify the investment.

First and foremost, it allows traditional fixed and mobile carriers to continue to provide circuit-switched services while they gradually migrate subscribers to IP. This is a crucial advantage for IMS, as it is clear that migration to all-IP will take another decade.

- IMS comes at just the right time in the technology upgrade cycle. According to convergence gear vendor Apertio, today’s core networks are ten years old and 21 percent of the infrastructure will reach “end-of-life” in the next 12–24 months. It is also clear that today’s networks require substantial improvements for delivery of the next-generation services.

- Broadly, the benefits from the migration to IMS fall into three categories: CAPEX savings, OPEX savings, and service and applications benefits. Cost savings will be more perceptible in the short term, the revenue upside remains a long-term proposition.

- Walled garden models will not work in an IMS world: The telco response to threats has traditionally focused on protecting legacy businesses; Pyramid believes walled garden models do not take full measure of the challenges telcos are facing. Alternatives to walled garden models are more open and offer a glimpse of the future. With both the smart pipe and the federated models, the telco leverages IMS to become a 'facilitator' of communications, entertainment, and media B2B services, as well as peer-to-peer communication.

- The upside of IMS is attractive: by 2010, IMS can serve as many as 58 million VoIP households globally, half of which will be using FMC services. Pyramid also sees a global IMS service revenue opportunity around $30 billion by 2010. Each FMC household will have more than one subscriber with an SIP-enabled mobile device; the number of total FMC users will be 2–3 times higher than the number of households. If blended applications deliver on their promise, worldwide, another 66 million (or 2 percent) of all mobile subscribers will be using SIP-enabled mobile devices by 2010.

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