Research Notes

Can IMS save the mobile market?

Or will we end up “walled garden” again

IMS (IP Multimedia Subsystem) is often highlighted as the big solution towards convergence on the mobile market. With an IMS-upgraded mobile network it is possible to develop IP-based services, which will function non-dependant of network, meaning real convergence between Fixed-line, mobile and the internet is possible. In spite of IMS technically without a doubt is progress in ensuring more advanced and attractive services cross networks for the end-users, then the challenges for the market is more dark.

IMS makes it possible for fixed line and mobile operators to utilize a ”walled garden” business model where they decide which services the service providers may offer the end-users. This is due to the fact that IMS lets the operator keep control with the network. Still today a lot of operators wish to pursue this business model, in spite of all data shows that the ”open garden” business model is the best solution for everyone, inclusive the operators.

Fixed-line operators however have other reasons than the ones of the mobile operators for implementing IMS. For fixed-line operators it is all about keeping traffic in the cobber. As everyone knows fixed-line traffic is on the demise, and traffic is migrating to mobile and/or IP.  For the fixed-line operators it is a struggle to survive. Fixed-line operators have a natural interest in using the cobber network as part of the service market cross networks, where the end-user pays for the services and not just for network access, as with the internet today. It is exactly this IMS can offer the fixed-line operators, an access pass out of the queue to become a dumb internet “bit pipe” where end-user prices fall, as pointed out in the report ” Successful Strategies for the future Mobile VAS market

For mobile operators IMS is a possibility to fight against 3rd party suppliers of mobile telephony as well as other services (especially IM/Instant Messaging) via IP, which threatens to intensify the competition on simple voice, sms and other services. But it is also an opportunity to offer their customers attractive services on a standardised platform, which makes it cheaper to develop services by re-using elements. On of the mega trends identified by in the report ”Mega trends in the mobile industry – Second Edition” is precisely that the profit margins will decline, which mobile operators already are experiencing or/and are going to experience the coming years. A method to counter this trend is to offer the customers more attractive services.

IMS is however hugely retained due to the lack of standards and IMS compatible terminals. For a mobile terminal to run an IMS service, it requires an IMS client on the terminal, either pre-installed or downloaded Over-The-Air (OTA) as pointed out in the report  ”Successful strategies for the future mobile VAS market”. As non-smartphones only can install Java-applications , all other terminal require a pre-installed IMS client, as Java IMS clients in praxis are to limited. IMS also requires the terminal to be SIP-compatible, as SIP is required to regulate to IMS services. SIP can be implemented in the IMS client itself, but SIP functions best if implemented on a lower level in the terminals software platform, so that SIP not is slowed down by applications, and have speedy access to the terminals basic functionality. This makes SIP compatibility based on a Java application less useful.

To sum-up, IMS open for standardised IP-based services, the question is however is mobile and fixed-operators can resist the temptation to use the “walled-garden” business model once again.

Successful strategies on the future VAS market

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