IMS_Outlook_Mar06.pdf

Outlook

IMS impact on OSS

March 2006

OSS ObserverPO Box 1319Sugar Grove, IL 60554Tel: +1.630.466.9223

Outlook

IMS impact on OSS

March 2006

OSS ObserverPO Box 1319Sugar Grove, IL 60554Tel: +1.630.466.9223

IMS WILL DRIVE THE NEED FOR MULTISERVICE OSS APPLICATIONS IN ALL FUNCTIONAL AREAS By Peter Mottishaw

CONTENTS

Executive summary, p1

Market forecast, p2

IMS defined, p3

Market drivers, p5

Business environment, p8

OSS requirements, p13

IMS solution suppliers, p18

Market definition, p24

Recommendations, p27

Figure 1: OSS forecast, p1

Figure 2: IMS equipment forecast, p2

Figure 3: IMS architecture, p4

Figure 4: IMS architecture -3GPP and TISPAN, p25

Figure 5: OSS market segments, p26

Table 1: Commercial IMS services, p9

Table 2: IMS contracts, p12

Table 3: IMS equipment providers, p18

Table 4: Ericsson, p20

Table 5: Siemens, p21

Table 6: Lucent, p22

Table 7: Nokia, p22

Table 8: Alcatel, p23

Executive summary n 2005 the first commercial IMS services became available. There are approximately 50 CSPs who have purchased IMS equipment

and these will provide commercial service in 2006. Europe is ahead of North America and Asia-Pacific in terms of IMS spending, but all three regions will see significant IMS spending in 2006. Mobile services such as video sharing have been the early drivers for equipment spending. Fixed services such as IP Centrex and IP Telephony are becoming more significant. Converged services using dual mode handsets will also drive IMS spending in 2007.

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We forecast that the OSS spending to support IMS will grow from $30 million in 2006 to $500 million in 2011 at a CAGR of 72% (figure 1). Real-time convergent charging will drive the early growth. The early adopters of IMS will achieve large scale, multi-service deployments in 2007. The need to control operational costs, rapidly deliver new services and provide a reliable customer experience will drive spending on horizontal, multi-service OSS solutions in 2007 and beyond.

Figure 1: Commercial OSS spending forecast for IMS services, 2005 - 2011

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Total OSS spending $30 $140 $280 $360 $420 $500

2006 2007 2008 2009 2010 2011

Source: OSS Observer

2006 OSS Observer LLC. All rights reserved worldwide 1

IMS Outlook: 2006-2011 2

Market Forecast OSS Observer forecasts that the IMS equipment market will grow from $470 million in 2006 to $4.96 billion in 2011 at a CAGR of 60% (figure 2).

Figure 2: IMS Equipment forecast, 2006-2011

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Application driven spend $130 $480 $860 $1,250 $1,750 $2,530

Infrastructure spending $340 $700 $990 $1,490 $2,110 $2,430

2006 2007 2008 2009 2010 2011

Source OSS Observer

The forecast includes all the revenue NEMs generate from supplying CSPs with IMS capable equipment. The infrastructure spending includes the CSCF (serving, proxy and interrogating) and HSS products. The application driven spending includes the application servers and media resource functions. The forecast excludes the system integration and other services required to deliver a solution. It also excludes IMS clients, client software and the soft-switches and media gateways used to integrate with legacy circuit-switched services.

EMEA is currently the leading region in terms of IMS deployments. Most deployments are with mobile operators and support specific services such as video showing. EMEA mobile will grow quickly in the next 18 months as push-to-talk over cellular (PoC) deployments are upgraded to IMS. The major European operators; such as Telecom Italia, Telefonica and France Telecom; are bringing their mobile and fixed operations closer together. They will make strategic investments in IMS as the common control layer for fixed and mobile networks. As a result, deployment of a common core IMS will become the most significant segment in the next few years. In the fixed area there will be rapid growth in IMS spending as consumer IP telephony and business IP Centrex services are migrated to an IMS control layer. Telefonica has already done this for their IP Centrex service and BT has recently made the transition with their consumer BT Communicator service.

North America has seen some major commitments to IMS from AT&T, Verizon, Cingular, BellSouth and Sprint. With the exception of Sprint this has not led to significant spending. To enable new services tier 1 operators in the US will start to

2006 OSS Observer LTD. All rights reserved worldwide


transition their residential VoIP offerings to IMS. They will also deploy new mobile services with IMS in the coming 18 months. They will be slower than the Europeans to invest in a common IMS core across fixed and mobile networks with the exception of Sprint who has already moved forward in that direction.

Asia-Pacific has had a number of IMS deployments in mobile networks to support video showing and push-to-talk. This trend will continue with strong growth in mobile IMS spending over the next two years. Migration to a common control layer for fixed and mobile networks will become the main driver for IMS deployment in the near future.

Commercial OSS forecast for IMS equipment and related services OSS Observer forecasts that the OSS spending to support IMS will grow from $30 million in 2006 to $500 million in 2011 at a CAGR of 72% (figure 1). Included are all the billing, customer care, service assurance and service fulfillment solutions that are deployed specifically to support IMS. OSS spending will become significant in 2007 when the early adopters of IMS start to move to multi-service, multi-vendor, large-scale deployments and can no longer efficiently manage with the NMS and custom solutions supplied by the equipment provider. As deployments start to scale up and automation becomes critical billing will be the first area of OSS investment, followed by service fulfillment. Unless CSPs experience major quality of service issues in the early deployments we expect the timing of investment in service assurance to be slightly behind these.

IMS Defined The IMS vision is of an infrastructure that supports services built from any combination of multimedia components; voice, video, messaging, data, content and gaming. It will enable rapid deployment of new services that combine these components in new ways and it will enable third parties to provide these services. The end user will have a common experience and common data across all devices; mobile handset, PDA, PC, IP TV. All of this will be delivered across a common IP core network and support any available access network; DSL, cable, mobile, WLAN, enterprise data services, WiMAX.

The IP multimedia subsystem (IMS) originated as part of the third generation partnership project (3GPP) standards. It was initially introduced with release 5 of the 3GPP standards completed in 2002. It provides an IP based control layer to support IP multimedia sessions between end-users. New services can be delivered more easily because IMS enables application servers and media resource functions to participate in the multimedia sessions. In order to fulfill the IMS vision IMS standards are being developed to ensure access independence, so that the same service control infrastructure can be used across mobile, wireless LAN and broadband access networks. More background on this is provided in the market definition section.

IMS services IMS supports session based multimedia services with a common experience and shared data across the different access technologies.



Examples of IMS based services:

Presence - real-time status and current preferred method of communication for contacts.

"See what I see" - during a voice call initiate a video stream from the camera on your handset to the other person.

Push to talk - push a button to talk to everyone in a given group. Network phone book - contact information is available from any IMS client. Instant messaging real-time text based interaction Interactive games - real-time peer-to-peer gaming. IP Centrex services business VoIP services IP Telephony consumer VoIP services

IMS will be integrated with other services such as IPTV to support presence, voice conferencing, instant messaging and other services.

The services enabled by IMS are not fundamentally new, but IMS provides the infrastructure to tie the services together and to combine different services within the same session. Many services will be based around the same presence service and use common network phone book capabilities. The same user interface will provide the presence, status and availability of contacts and enable push to talk, instant message, text message, video call, conference call and services not currently envisaged. A major attraction of IMS is that it will provide the same user profile and services regardless of access technology or client technology.

IMS architecture and products A more detailed description is provided in the market definition section.

Figure 3: IMS Architecture and OSS functions

xDSL CableUMTS CDMA WLAN

IP Core

HSS

CSCF

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Service Layer

IMS Control Layer

Transport Layer

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IMS Client Layer

Application Server

Presence, 3rd Party Access, Messaging, Location, Service Delivery PlatformService Delivery Platform

Network Assurance

Activation

Device Management

Inventory

Customer Self Care

Order Management

Real time charging

Service Quality

Source OSS Observer



The principle components of the IMS architecture shown in figure 3 are:

HSS - home subscribers server - stores user profiles and service related data. CSCF - call session control function - processes and routes SIP signaling messages AS - application server - processes SIP messages and executes the service logic for

specific services such as presence, push-to-talk or voice conferencing. SDP - service delivery platform - not strictly part of IMS, but enables rapid creation

of new services that use IMS. Client - IMS clients communicate via the CSCF using SIP signaling. MGW and MGCF inter-work SIP signaling and voice over IP to legacy circuit

switched networks.

Market drivers Most major CSPs are investigating or trialing IMS. A few have launched commercial services based on IMS. Investment in IMS is a strategic business decision justified by deployment of multiple services over multiple years. Investments in OSS will lag the investment in IMS. The second wave of larger scale, multiple service IMS deployments will drive major OSS investments starting in 2007.

We see seven important drivers and four inhibitors for growth in investment in IMS equipment and infrastructure.

Market drivers

Enable new multimedia services Rapid, low-cost deployment of new services Fixed mobile convergence Common IMS core Differentiate from "best efforts" service providers All IP network Third-party services

Market inhibitors

Competition from bit pipe operators and best efforts services IMS client availability and usability Compelling IMS applications Interoperability issues

Drivers

Enable new multimedia services CSPs are looking for new revenue streams and ways to attract and retain customers. Multimedia services that combine voice, video, data, content and interactive services in new



ways are one way to achieve this. TMN in Portugal, for example, has carefully targeted their IMS based video sharing at families. They have bundled multiple handsets with attractive voice and video tariffs for communication within the family. This has improved customer retention while providing additional revenue. Opportunities like this will be major drivers for investment in IMS.

Rapid, low-cost deployment of new services Historically it has been slow and expensive to introduce new services. As a result, CSPs have been reluctant to test the market with unproven services. IMS in combination with next-generation SDPs significantly reduce the cost of introducing new services and the time to market. This will reduce the CSPs risks in experimenting with innovative new services and lead to new revenue sources and will be one of the strategic drivers for IMS investment.

Fixed mobile convergence The fixed mobile substitution trend, where some customers use their mobile handset for all voice calls, is a threat to fixed line operators. It is also an indication that customers would prefer a single personalized wireless communications device. Network operators are responding to this with dual mode handsets and services that operate on both WiFi and cellular networks. This can also address problems with in-building coverage and has the potential to make use of cheaper, higher bandwidth WiFi coverage for both voice and data.

Unlicensed mobile access (UMA) is one approach to offering voice services on dual mode handsets. It makes use of the existing call control capabilities of the GSM network. An alternative is to use IMS to provide a common call and session control capability on both the fixed and mobile networks. This is particularly attractive to fixed line operators trying to reduce the rate of fixed mobile substitution. The advantage over UMA is the ability to provide multimedia services in addition to voice. The opportunity to improve customer retention and increase ARPU by offering integrated fixed/mobile service will be a major driver for IMS investment.

Common IMS core Many CSPs own both fixed and mobile networks and would like to reduce costs by sharing infrastructure between the networks. There will be an increased trend towards a common core IP network, with fixed and mobile providing a range of access options. This will reduce operational costs and the cost of developing new services. IMS is the ideal "access agnostic" IP control layer for such a converged network. The opportunity to save costs will drive IMS investment.

A related driver is standardization of the control layer for Tier 1 CSPs who own multiple operating companies. Operators like Vodafone will use IMS to reduce costs by moving to a single IMS control layer across all operating companies. It also increases their ability to deliver consistent services and branding across operating companies. A key capability of IMS is its independence from the access technology.

Differentiate from "best efforts" service providers Many of the services envisaged for IMS can be supplied over a best efforts IP connection. The Skype service from eBay or the Yahoo! Messenger with the voice service provide presence with instant messaging, voice calling, voice conferencing and connection with the legacy PSTN network. The Skype client is available on different devices; PCs, Microsoft Windows Mobile devices. Many Skype services are free and represent a major threat to CSPs revenues. IMS enables differentiation between these types of services by providing explicit control over the quality of service of a multimedia session. It enables a standards-based environment for service creation and it supports standards-based flexible billing.



We expect low-cost, best efforts services such as Skype, Yahoo messenger, MSN messenger, AOL messenger and others will be successful, but IMS will enable CSPs to deliver a better customer experience and charge a significant premium. Some of the Instant Messenger companies will choose to cooperate with CSPs and deliver premium versions of their services using IMS technology and leverage their customer base and their brand name. Yahoo for example has already taken this approach with BT in the UK.

All IP network In fixed and mobile networks, CSPs can significantly reduce costs by transitioning to IP networks. In the fixed network, residential broadband and business data services are increasingly standardized on IP transport. CSPs are transitioning out their voice networks going from circuit switched to IP technology. Mobile operators have introduced IP networks to support data services like GPRS and are rapidly moving to IP core networks with the introduction of mobile soft-switches. IMS is the leading standards-based control layer to support real-time session based services such as voice over IP, video sharing and presence in a carrier IP environment. The transition to IP will be a major driver for IMS investment.

Standardization CSPs require interoperation of services to maximize their market opportunity. In a mobile environment, services must work when connected to competitors networks. This requires a certain level of standardization of the basic service capabilities. IMS provides this level of standardization in an IP environment.

Third-party services IMS in combination with next-generation SDPs enable CSPs to open their network to third parties to offer innovative new services. This will create new revenue streams and improve customer retention as third parties address the needs of specific market niches.

Inhibitors

Competition from bit pipe operators and "best effort" services CSPs providing IMS based applications are in direct competition with best efforts or over the top services which use the fixed or mobile IP network as a bit pipe. Google, Yahoo, eBay (Skype) and MSN are well positioned to compete with their large installed base of IM and VoIP customers. CSPs must deliver applications that use the unique IMS capabilities to provide compelling value beyond what is available from "best efforts" services. This means taking advantage of quality of service capabilities, interoperability and standardization to differentiate IMS based applications from unmanaged Internet-based applications. Bundling and innovative pricing can also help. The challenge of using IMS to deliver clear differentiation from best effort services is one of the major risks, especially in the fixed market where the bandwidth to support VoIP is cheap and widely available.

In the U.S., companies like Google have been supporting the "net neutrality" movement in recognition of the opportunity for best efforts services. If net neutrality is adopted by regulators it may stop CSPs from charging a premium for higher quality service and will dramatically reduce the investment in IMS. CSPs will no longer have a business case to justify the investment.

IMS client availability and usability IMS client software requires certain capabilities from the platform on which it runs; for example a Java capable phone with IP connectivity. A given IMS application may require additional capabilities. In the example of mobile video sharing during a voice-call the handset



requires hands-free capability in addition to a video camera. The market penetration and pricing of handsets that meet all these requirements will limit the available market for the video sharing service. Another client related issue is the need to remotely install and manage the client software. In the mobile market client related issues are the biggest limitation on the overall market size.

Compelling IMS applications IMS is not dependent on a single killer application for success, but does depend on the success of a number of unproven or risky application/service models. In the mobile market, applications such as presence, push-to-talk and push-to-share (e.g. video) contribute to the business case for an IMS infrastructure. In the fixed market applications such as presence, IPTV, IP Telephony and IP Centrex support the IMS business case. If a number of these services fail to gain market acceptance, investment in IMS infrastructure will be slowed.

Interoperability issues The IMS services offered by CSPs must interoperate and continue to function when roaming to another network. Recent experience with multimedia messaging services has shown how interoperability issues can slow the up take of new services. IMS vendors must ensure multi-vendor interoperability between handsets and networks, and between networks to avoid this experience with IMS based applications. These issues are being addressed by interoperability testing events organized by the GSM Association. In the fixed and mobile markets, interoperability issues are likely to slow the progression of IMS based services.



Business Environment IMS is still in the early market phase. There have been approximately 50 significant contracts signed by CSPs for IMS equipment. Approximately 10 of these CSPs are offering commercial IMS based services. Video sharing between mobile handsets is the leading service with deployments by Telecom Italia, TMN in Portugal and CSL in Hong Kong. An additional 100 CSPs are conducting IMS trials for a range of mobile, fixed and converged services.

There are a small number of commercial services available today that are delivered using a true IMS infrastructure. Some examples are:

Table 1: Examples of commercially available IMS based services

CSP Service offering Vendors Date BT, UK BT communicator service Alcatel, ACME Packet 4Q 2005 CSL, Hong Kong Video sharing service Nokia November 2005 NTT DoCoMo, Japan PushTalk service NEC October 2005 TMN, Portugal Video sharing service Nokia July 2005 Telefonica, Spain IP Centrex service Ericsson, Hotsip April 2005 Telecom Italia Mobile "Turbo Call" video sharing service Nokia February 2005

Source: OSS Observer, Company briefings

IMS deployments are mainly single vendor small-scale, projects. As a result, the OSS requirements can be met by the NMS solutions provided by the equipment vendor.

IMS precursors IMS is a technology that provides the control layer for session based multimedia services. Historically voice calls over a circuit switched network have been the only session based multimedia service. The SS7 network provided the control layer. The majority of mobile and fixed voice calls are controlled by the SS7 signaling protocol. Over the last 10 years, voice over IP technologies have been developed with their own control protocols. SIP provides the control layer in voice over IP networks in a way similar to SS7 in circuit switched networks. SIP is a flexible signaling protocol that can control a wide range of IP based services such as instant messaging, presence and video calling. 3GPP has adopted SIP as the main signaling protocol for IMS.

The importance of SIP is that it is already widely deployed by CSPs for services like IP Telephony, IP Centrex and PoC (push to talk over cellular). The current state of deployment of these services and other IP based services are important in understanding the IMS business environment. The most important precursors of IMS are:

Push to talk over cellular Voice over IP in the fixed network Mobile soft-switches fixed mobile convergence SDP Real-time charging OSA/Parlay IP quality of service



Each of these introduces network elements and/or services that have a direct upgrade path to IMS compliance or directly enable IMS services. The following paragraphs summarize the current state of deployment for each IMS precursor.

Push to talk over cellular Push to talk is a mobile service where groups of people are constantly available to each other at the push of a handset button. Only one person can speak at a time but everyone in the group hears them . Nextel developed a very successful push to talk service in the 1990s based on Motorola iDEN technology. Initially started as a business service it has also been successful with consumers. The Open Mobile Alliance (OMA) has developed standards known as "push-to-talk over cellular" (PoC) to deliver push-to-talk services over the GSM family of technologies. The first release was finalized in June 2005. It uses SIP signaling and the voice is delivered over IP. Some performance problems have been experienced, but these can be dealt with by appropriate configuration of the GPRS network. There are more than 50 handset models available supporting OMA PoC and more than 33 commercial OMA PoC services are now in operation. Although over-hyped in the last couple of years PoC will be a successful service.

OMA PoC does not require IMS, but is targeted at using the IMS infrastructure that will become available with 3GPP Release 5. In the past few months, a number of OMA PoC deployments have been upgraded to IMS compliance. This trend will continue. OMA PoC is important to IMS because it drives the introduction of SIP based application servers and clients into the mobile network. The presence and group management servers required for PoC can be reused by other IMS based applications. This reduces the incremental investment to full IMS deployment.

Voice over IP in the fixed network VoIP technology has been around for more than a decade and is fairly mature. VoIP based services are well established for consumers and enterprise customers. Tier 1 CSPs such as Verizon, AT&T and BT have offered voice over IP services for some time and are investing in infrastructure to accelerate the transition to voice over IP. Innovative new entrants such as Skype and Vonage have been critical in pushing the CSPs in this direction. Companies like Cisco and Avaya have rapidly increased the penetration of IP phones and IP PBX.

There is a number of competing industry and proprietary standards for the control layer in these deployments, but SIP is now the market leader. This is very positive for IMS because it is based on SIP, and provides the additional capabilities that CSPs require in terms of quality of service control, billing and standardization. Most SIP vendors who are focused on the CSPs will offer an upgrade path to full IMS capability.

Mobile softswitches Most mobile CSPs are committed to moving to 3GPP Release 4 and many are close to full deployment. This will introduce an all IP core with mobile soft-switches and media gateways providing the interface between the IP network and the circuit switched network for voice services. This is an important step towards IMS deployment. IMS can provide the control layer within the IP core even if the voice and video services are delivered to the handset using circuit switched connections.

Fixed mobile convergence Fixed mobile convergence enables a single handset to be used both on the wide area cellular network (GSM or CDMA for example) and using a local wireless connection (WiFi or Bluetooth) when in the home or office. The unlicensed mobile access (UMA ) initiative is driving one approach to delivering this. It has support from BT, Cingular, T-Mobile, O2



and Rogers Wireless. BT has deployed its Fusion service based on this technology and is claiming rapid uptake.

The success of UMA is important for IMS in establishing and promoting the "dual mode" handset and service. UMA does not use IMS technology and in the short-term provides an advantage over IMS based solutions by supporting handoff between the wide area and local area wireless technologies. Because of its support for other services, many CSPs will choose to go directly to IMS based solutions if UMA is successful,.

SDP Service delivery platforms enable the creation and execution of services that combine content, data, voice and video. Many CSPs have deployed a variety of service delivery platforms over the last few years. Most mobile operators deliver content and downloads from a service delivery platform. A number of CSPs use SDPs to deliver new voice services using Parlay interfaces to existing equipment.

SDP deployment is important to IMS because IMS provides an ideal control layer for the SDP to deliver session based multimedia services. In the IMS architecture, the SDP looks like an application server and current deployments of SDPs can be seen as a precursor to deployment of IMS application servers. Most SDP providers support or plan to support the IMS ISC interface.

Real-time convergent charging Real-time convergent charging is the capability to maintain a single account balance across multiple services in real-time. Prepaid mobile, based on IN real-time charging, continues to grow rapidly. Due to the growth in the number of mobile services, some operators have started to deploy convergent real-time charging to enable prepaid accounts across all services.

Real-time convergent charging is important for IMS because it is one of the key benefits beyond the basic SIP architecture. Companies like Telcordia already provide their real-time convergent charging solutions on IMS compliant platforms. This effectively introduces IMS components into the network and strengthens the case for future IMS deployment.

OSA/Parlay The OSA/Parlay standards support the development of call control applications in a standard IT software development environment. The Parlay X standard provides a Web services Interface for application developers which requires very little knowledge of the call control layer of the network. Parlay gateways have been deployed by a number of CSPs to support both internal development and provide secure access to third-party developers.

OSA/Parlay deployments are important to IMS because OSA/Parlay is the standard adopted within IMS to support third-party access to the session control capability.

IP quality of service IP quality of service is a set of mechanisms that enable an IP network to be configured so that different IP packets can be delivered with different quality of service levels. This technology has been widely deployed in carrier IP networks. Nearly all MPLS VPN services are offered with multiple levels of quality of service. This is essential to enterprises who want to deliver voice over IP and data over the same VPN.

Because it is one of the key mechanisms IMS uses to differentiate itself from a best effort SIP based service the maturity and widespread use of this technology is important to IMS.



IMS trials and contracts IMS equipment providers claim more than 150 IMS customer engagements. Approximately one third of these are commercial contracts and the remainder are trials. The leading NEMs are Ericsson, Siemens, Lucent, Nokia and Alcatel. Mobile deployments account for about half of the customer engagements, with the remainder evenly split between fixed networks and fixed/mobile convergence applications. EMEA is the leading region with about half the customer engagements. Asia-Pacific is next with a quarter of customer engagements and North America is close behind. CALA makes up the rest.

Publicly announced customer engagements are shown in table 2.

Table 2: Publicly announced IMS trials and contracts, January 2005 - February 2006

Date Contract 02-Feb-05 TA Orange awards Alcatel a USD 133 million contract to expand and upgrade its mobile network in Thailand 14-Feb-05 Merging fixed and mobile networks: France Telecom and Siemens test Fixed Mobile Convergence solutions

based on IMS Joint press release 14-Feb-05 Ericsson selected by Telecom Italia Mobile (TIM) to supply IMS based combinational services 14-Feb-05 TIM and Nokia to commercialize Video Sharing in Italy on the Nokia 6680 15-Feb-05 Ericsson and TeliaSonera to trial IMS for converged multimedia services 15-Feb-05 Nokia and TeliaSonera agree to cooperate in trials for developing the networks of tomorrow 15-Feb-05 T-Mobile USA selects Alcatel to enhance its national core network 23-Feb-05 Belgacom Chooses Italtel and Cisco Systems to Develop Its IP Based Multimedia Services 07-Apr-05 Ericsson provides Telefnica with IMS for IP telephony and IP Centrex services 07-Jun-05 CMC Telecom Selects Lucent Technologies and Dynavar Networking to Deploy Complete Next-Gen TDM

and VoIP Solution 07-Jun-05 Nokia supplies advanced Fixed Mobile Convergence solutions to Saunalahti in Finland 08-Jun-05 Ericsson provides TDC with IMS for telephony and IP Centrex Services 13-Jun-05 Nokia to expand Elisas networks, bring high data speeds to 3G 14-Jun-05 Lucent Technologies and Japans eAccess Complete Successful HSDPA Calls as Part of 3G Network Trial 14-Jun-05 Telkomsel trials 3G with Nokia in Indonesia 28-Jun-05 Nokia brings Presence to TeliaSonera Finland 05-Jul-05 Lucent Technologies Awarded PHS Network Expansion Contracts by Chinas Gansu Telecom and Shandong

Netcom 18-Jul-05 Portugal's TMN chooses Nokia for Video Sharing 22-Jul-05 Siemens achieves market entry for convergent network technology in China: Chinese consortium orders IMS

solution for multimedia applications 27-Jul-05 Alcatel selected for Euro 17 million VoIP solution for PTK in Kosovo 24-Aug-05 Sky Link and Lucent Technologies Enhance CDMA450 Network in Moscow with CDMA2000 1xEV-DO

Technology and Lay Foundation for IMS-based Multimedia Services 26-Aug-05 Ericsson and BB Mobile show IMS service handover between 3G and WLAN 07-Sep-05 Ericsson's IMS selected by Commander in Australia for DSLAM initiative and deployment of new multimedia

services 08-Sep-05 Lucent Technologies Migrates Telefnica Empresas Services 05-Oct-05 Nokia to trial Fixed Mobile Convergence solutions with Telemar Oi in Brazil 13-Oct-05 Ericsson and Rogers Communications Inc. to trial 3G/HSDPA and IMS platform in Canada 17-Oct-05 Cingular Wireless selects Lucent Technologies IMS-Based Solution for Evolution to Next-Generation Services 18-Oct-05 SBC Communications Selects Lucent Technologies Multimedia Platform to Enable Anytime, Anywhere Access

to Consumer IP Services 20-Oct-05 O2, Manx Telecom and Lucent Technologies to Launch First Commercial 3G 25-Oct-05 Alcatel's SIP solution puts BT at the forefront of service innovation 26-Oct-05 China Netcom selects Alcatel for nationwide next generation network evolution 07-Nov-05 CSL launches Asia's first commercial video sharing service with Nokia IMS



08-Nov-05 BellSouth Selects Lucent Technologies Next-Generation Solution to Enable a Range of Advanced Consumer IP Services

30-Nov-05 Nokia and PLDT cooperate in Fixed-Mobile Convergence solutions in the Philippines 30-Nov-05 Ericsson Mobile Softswitch, IMS and UMA tapped for SunCom Wireless' next generation network 05-Dec-05 Nokia powers Eurotel's WCDMA 3G network in the Czech Republic 14-Dec-05 Verizon Tests Nortel IMS Solution 06-Jan-06 NEC's IMS Platform Contributes to Realization of NTT DoCoMo's New PushTalk Service 12-Jan-06 Nokia to supply Push to Talk to Fujian MCC in China 01-Feb-06 Lucent Technologies Provides Brasil Telecom with IMS Elements for VoIP Services 14-Feb-06 Alcatel enables mobile Next Generation Network services in Russia 14-Feb-06 Lucent Technologies Supplies vistream with Advanced Network and Real-Time Rating and Charging Platform

in Germany 14-Feb-06 Ericsson selected by Vodafone Group as a supplier of IP Multimedia Subsystem with 14-Feb-06 Vodafone awards global contract to Nokia for IMS 15-Feb-06 Ericsson and Telenor to test convergent and seamless IMS Services

Source: Company reports

OSS requirements and implications The vision for IMS is of an infrastructure that supports rapid low-cost creation of new IP multimedia services from any combination of voice, video and data. The same service will be available across all access technologies; 3G mobile, xDSL, cable, WLAN, WiMAX. The end user experience will be of instant gratification with a wide choice of services. Many services will combine IP multimedia capabilities in new ways. OSS solutions must support this vision.

This vision has certain implications for all OSS segments. The deployment of a common control layer across all access technologies , which supports many different types of services, will drive CSPs towards multi-service, multi-technology OSS solutions in each functional area. Vertical solutions developed for a specific service or technology must evolve towards horizontal solutions supporting multiple services and multiple technologies. A service fulfillment solution for DSL, for example, must evolve to support converged services.

Rapid low-cost service creation is a critical part of the IMS business case. The implication for OSS solutions is that they have the flexibility to support new services. To achieve rapid low-cost creation of the OSS capability will require integration of some OSS functions with the CSPs service creation process. This will require close cooperation between OSS solution providers and SDP providers.

With the rapid creation of new services and the introduction of IMS comes the proliferation of IT platforms in the CSPs network. These will be in the form of application servers, service delivery platforms and media resource functions. The implication for OSS solution providers is the need to manage these IT platforms in addition to the network components.

IMS deployments are at an early stage, are generally driven by a single service and largely single vendor. As a consequence the equipment provider meets the OSS requirements. This will change as IMS deployments become multi-service and multi-vendor starting in 2007. OSS vendors who are strong players in the IMS precursor services such as IP Centrex, consumer IP telephony and PoC will be well positioned to benefit. In the area of real-time



convergent charging, we are already seeing IMS driven deals. Telcordia in particular has benefited.

Billing The CSP must be able to offer innovative pricing and bundling of IMS services. Historically billing systems have been postpaid and based on offline processing of CDRs. Recently mobile prepaid services have been provided using dedicated real-time IN based charging. The IMS billing system must converge both of these models while supporting the creation and delivery of new services.

The principle requirements for an IMS billing system will be:

Convergent billing system Real-time convergent charging and rating Customer visibility of real-time status of account and services Rapid low-cost service creation High availability Partner settlement

Convergent billing system A convergent billing system is one that is not tied to a particular service or network technology. IMS will provide a common control layer across any access technology; mobile, broadband, wireless LAN, cable and enterprise data services. This is essential to the IMS vision of providing the same user experience regardless of access technology. There has been a general trend towards convergent billing systems; IMS will accelerate this trend beginning in 2007. The leading billing vendors, Amdocs, Convergys, Comverse, Portal, CGI/AMS, Intec and LHS; are already addressing this need and are well positioned to address the IMS opportunity.

Real-time convergent charging and rating Real-time convergent charging is the ability to manage in real-time a single account balance across all services available to a customer. This is central to the IMS vision of providing innovative combinations of multimedia services and instant gratification for the customer. Flexible real-time rating is the ability to support a range of approaches to pricing and complex discounting schemes. Pricing should support the variety of IMS services and be based on, for example, duration of service, amount of data transferred, number of messages. Discounting schemes should support cross service discounts, for example providing a free bundle of messages after a number of video sharing calls are completed.

The IMS standards provide the enablers to support real-time convergent charging and rating. Open standards based on the diameter protocol will open the market segment to OSS suppliers. IMS will be a driver in the replacement of the existing IN based real-time charging systems that support mobile prepaid services. We are already seeing solutions delivered in greenfield situations. IMS will start to drive replacement of IN based prepaid systems in 2008 onwards.

Real-time convergent charging is a new opportunity addressed by a number of vendors. Ericsson, Convergys, Openet and Telcordia have already won business in the segment. All the major billing vendors and some of the NEMs will challenge them.

Customer visibility of account Customer visibility of their account includes current balance, services used, services ordered and any discounts applied. Providing a simple real-time view is essential to deal



with the potentially complex bundling and discounting envisaged for IMS based services. This requirement is already being addressed by most of the major billing vendors.

Rapid low-cost service creation Billing systems must support the IMS vision of rapid low-cost service creation. This will require close integration between the service delivery platforms used by the CSP to create new services and the billing system. This will be achieved by a partnership between the SDP supplier and the billing vendor. Vendors such as Telcordia and Ericsson who provide both the SDP and real-time convergent charging solutions are well positioned to integrate service creation with billing.

Highly available system Billing systems have traditionally operated as offline CDR processing systems. There were strong requirements for maintaining the integrity of billing data, but this did not require continuous high availability operation because CDRs could be reprocessed if a failure occurred. IN based real-time charging was an exception, but the equipment supplier who expects continuous high availability operation for all carrier grade products has generally provided these. In IMS, architecture failure of the billing system can result in service being denied customers. Therefore high availability is a critical requirement. NEMs will be well positioned to supply the high availability components of the IMS billing system. Most will partner with billing system vendors to provide an overall solution.

Partner settlement One of the benefits of IMS will be to support CSPs in enabling third-party service providers to deliver content and services over their network. Inter-carrier billing and MVNO type requirements have driven the existing partners settlement solutions. IMS will require greater flexibility in the services supported and much larger scale in the number of partners and transactions supported.

Customer care IMS will have most impact on OSS functions that are close to the network. Its effect on customer care requirements will mainly be indirect. The increased rate of introduction of new services and the increased number of services that IMS will facilitate is the most important factor. It will put heavy emphasis on the need to control costs and meet customer expectations by providing comprehensive customer self-service. In the initial IMS deployments these self-service portals are often provided by the NEM, but as IMS deployments become multivendor, multiservice and large-scale an independent customer self-service solution will be essential IMS will have significant impact on spending in this area in 2008. The leading customer interaction vendors; Genesys, Siebel, Amdocs, Avaya and Vignette; are well positioned to take advantage of this.

Service assurance

IMS services are multimedia services delivered over an IP network. Historically the quality of service choices available to the customer was limited. Circuit switched networks provided a very high quality of service, the Internet provided the best efforts service and cellular networks provided something in between. IP networks are now flexible and configurable in the quality of service they provide. This creates challenges in delivering the required quality of customer experience for IMS services. OSS service assurance solutions are critical to meeting this challenge.

The specific service assurance requirements are;



Monitoring of IP multimedia customer experience Rapid creation of service models SLAs for third-party service and content providers Assurance of the IMS control plane Real-time performance monitoring

The following paragraphs provide more detail on these requirements.

Monitoring of IP multimedia customer experience

IMS uses IP quality of service mechanisms to provide the quality of service required for a given multimedia session. However, the quality of customer experience can still be impacted by network congestion, network faults, and configuration problems in the network and on the client. The growth of IMS based services will be severely limited if CSPs deliver poor or unpredictable customer quality of experience. CSPs will deploy IMS customer experience monitoring solutions to identify and diagnose problems quickly.

One approach will be to deploy active test probes in the network to simulate typical customer behavior and measure the quality of the customer experience directly. Active probe systems from Agilent, Casabyte and Sigos are used extensively in mobile networks. Brix provides a similar capability for VoIP networks. These solutions will be upgraded to support IMS based services over the next two years.

A complimentary approach is to monitor customer experience directly from the IMS client. This has the potential to measure the experience of actual customers, but has significant issues of battery life, privacy and use of client resources. Handset manufacturers, NEMs and ISVs are experimenting with this approach. We expect IMS solutions to be deployed in 2008.

Rapid creation of service models

Service management solutions enable CSPs to manage the service level provided for a particular service or customer. The approach has been to build service models that capture the dependencies for a particular service and then to correlate data from many sources to infer the quality of service provided. In an IMS environment where new services are being deployed it frequently becomes essential to generate the service models automatically. In principle this can be achieved by integration of service management with the service delivery platform.

The service management market is at an early stage and deployments so far have required a high level of customization. We expect the solutions to mature over the next two years and IMS will start to impact the market in 2007 and 2008. Telcordia and HP are particularly well positioned with leading positions in service management and offering service delivery platforms.

SLAs for third-party service and content providers

CSPs will use IMS to enable third-party service and content providers to deliver services over their network. CSPs will offer SLAs in order to attract the best content and services. This will be particularly important where the third party is paying for a higher level of quality of service than best effort. Service assurance solutions will be required to monitor the network performance and quality indicators required by the SLA. IMS will start to impact purchases in this area in 2007.



Assurance of the IMS control plane

IMS effectively replaces the existing SS7 based control plane of the mobile and fixed circuit switched networks with a SIP based control plane. Historically CSPs have invested heavily in SS7 monitoring solutions from suppliers such as Agilent and Tektronix. These solutions have enabled a range of applications such as SS7 network management, billing verification, fraud detection, billing verification, business intelligence and traffic management. In the IMS environment it would be possible to deploy a similar SIP monitoring solution. However, the real-time charging capabilities envisaged for IMS will support some of the applications previously provided by SS7 monitoring. In addition the NEMs will provide improved access to real-time data reducing the need for dedicated monitoring hardware. As a result we expect to see SIP monitoring systems deployed but not on the scale of SS7 monitoring systems. Agilent and Tektronix will evolve their existing systems to meet this need.

Real-time performance monitoring

IMS enables the rapid deployment of new IP multimedia services. These are potentially available to all customers as soon as they are deployed on an application server. Many services will only find a niche market, but some will achieve mass-market penetration very quickly. This will have unpredictable impact on traffic patterns and volumes on the IP network. Real-time performance monitoring solutions will be essential to give early warning of problems and to support network planning. IMS will drive spending in this area from 2008 onwards. The existing leaders in performance monitoring; Vallent, Telcordia, HP, Ericsson and InfoVista; will evolve their installed base to meet these requirements.

Service fulfillment

IMS significantly changes the service fulfillment problem. Mature IMS deployments will require a multiservice fulfillment solution that addresses the IP network and IT domains. The specific IMS service fulfillment requirements are;

Multiservice activation Common network resource management IP quality of service planning tools IMS client management

The following paragraphs provide more detail on these requirements.

Multiservice activation Automated activation systems fall into two categories; those focused on network activation for services like DSL, VPNs and Metro ethernet and those focused on activation of IT systems such as HLRs for mobile services. IMS will have most direct impact on the latter, but will require interaction between systems of both types. When a new IMS service is ordered the activation process will configure the user profile on the HSS and on the application server if required. These are IT oriented activation. It will verify the network capability to support the service. This may require the activation of a DSL connection for example. Finally it may need to verify the client capability to support the service. This procedure involves IT activation, possible network activation and possible device management. As a result, IMS will drive the need for multiservice activation systems that integrate IT oriented activation, network activation and device configuration.

IMS will not start to drive significant spending in this area until 2008. At this point IMS deployments offering a range of services over multiple access technologies will achieve the scale that requires automated activation. The leading network activation providers;



MetaSolv and Syndesis, are well positioned to participate in this, but will compete with the IT oriented activation providers such as Amdocs and Convergys.

Common network resource management Network resource management will be impacted in a similar way to activation. There will be a good business case to reduce operational costs by moving to a common network resource management system across all access technologies. There will be a requirement to include the IT oriented components such as HSS, application servers and media resource servers. IMS will also emphasize the need to manage capacity and quality of service in the IP network. Network resource management will need to track the capacity available for each quality of service.

IMS world drive spending in this area in 2008. The leading vendors, Telcordia, Cramer and MetaSolv are well positioned, but will need to add the IT management capability.

IP quality of service planning tools The IMS model of providing a service across all available IP access puts enormous emphasis on the network planning process. A new IMS service can be made available to all IMS clients simultaneously. If the service takes off rapidly and uses significant bandwidth or has demanding quality of service requirements it can quickly exceed available network capacity. The service may be provided by a third party giving little visibility to the CSP. The CSP does not want to lose revenue by denying service or delivering poor quality. We expect this to become an issue in 2008 with a wider IMS deployment. There will be a significant consulting opportunity for the NEMs services organizations.

IMS client management IMS clients will be deployed on complex client platforms (mobile handset, PCs, set-top boxes, PDAs) which are not under the direct control of the CSP. Initial IMS services such as mobile video sharing will require a new handset with the client and application preinstalled, but it will quickly become necessary to provide remote/over the air management of the device. OMA has standardized some device management capabilities which have been used for PoC clients. We expect that for mobile IMS deployments there will be spending on device management from the first commercial deployments.

NEMs network management solutions Most of the major NEMs recognize the importance of comprehensive EMS solutions for their IMS offerings. They have extended existing NMS solutions to manage IMS equipment and are working with OSS partners to provide overall OSS solutions. In most IMS deployments a network equipment manufacturer will provide the system and network integration and take ownership of the overall solution. The initial IMS deployments are relatively simple and NEMs will use their own EMS and NMS solutions to meet the OSS requirement. However in 2007 the scale and complexity of deployments will require NEMs to bring in OSS solutions from ISVs.

An interesting trend with IMS is to bring some OSS functionality closer to the network. In billing for example the real-time charging subsystem has similar availability and performance requirements to be network equipment. The HSS will bring some of the subscriber management functionality into the network. The NEMs are well-positioned to win this type of business.

IMS Solution Suppliers We have identified 24 significant suppliers of IMS equipment. The major NEMs generally provide comprehensive IMS solutions, IT companies focus



on the application server and provide SDP capability and smaller specialists deliver focused application servers.

Table 3: Comparison of IMS equipment providers V

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Provided the proxy CSCF for BT in partnership with Alcatel. Session border controller specialist. Acme Packet

{ { { Provides comprehensive IMS solution for fixed and mobile operators. Alcatel

z z z z z z HSS specialist. Provides subscriber data management solutions for T-Mobile, Orange and Vodafone UK. Apertio

{ { { Provides IMS application server and network gatekeeper. BEA { {

Broadsoft { { { { VoIP application server specialist Provides IMS solution for fixed and mobile. Cisco { z Provides comprehensive IMS solution for fixed and mobile operators. Ericsson

z z { z { Provides presence server for Ericsson IMS offering. Hotsip (Oracle) { { { Provides HSS and IMS application server. HP Provides IMS solution for fixed and mobile operators. Huawei { { { { {

IBM Provides IMS application server. Provides media servers and application servers. Siemens application server partner. IP Unity

{ { Provides IMS solution in partnership with Cisco. Italtel { Provides comprehensive IMS solution for fixed and mobile operators. Lucent

z z z z Provides IMS solution for fixed and mobile operators. Motorola z { z Provides IMS solution for fixed and mobile operators. NEC { { z z Provides comprehensive IMS solution for mobile operators. Nokia z z z { Provides IMS solution for fixed and mobile operators. Nortel z

Personeta { IMS application server specialist. Provides comprehensive IMS solution fixed and mobile operators. Siemens z z

Sonus VoIP network specialist. Tekelec { Signaling network specialist. Telcordia { IMS real-time billing and application server provider.



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IMS application server provider. Partner with Nokia, HP, Siemens and Lucent. Ubiquity

{

{ = has a presence in the market = has a notable presence in the market z = market leader

Source: Company briefings and OSS Observer analysis

Ericsson Ericsson is the worldwide market leader for mobile equipment supplied to CSPs. Revenues from selling telecoms equipment, software and services to CSPs was approximately $17.7 billion in 2005. More than 90% of this is from mobile networks. Ericsson claims more than 40% market share in the GSM/WCDMA market. It also supplies CDMA 2000 equipment. Ericsson provides a comprehensive portfolio of IMS products and applications.

Ericsson completed the acquisition of most of Marconi's product portfolio in January 2006. This significantly strengthens Ericsson's position in transport networks and in fixed broadband access. The acquisition included Marconi's Impact IMS product line. It is not yet clear how this will be integrated with Ericsson's existing IMS product line.

Publicly announced customers include:

Vodafone Group - selected Ericsson as its IMS vendor in February 2006. Telenor - trial of fixed mobile convergence. TeliaSonera trial of common applications across fixed and mobile plus IP

telephony and PoC. Telefonica - has deployed Ericsson's IMS solution in its fixed network to support

IP Telephony and IP Centrex. It launched IP telephony for residential users in June 2005.

TDC in Denmark - IP telephony and IP Centrex. Commander in Australia - multimedia services over residential broadband. Telecom Italia Mobile - enriching voice capabilities with sharing of video and

white boarding. Sprint - major system integration project started in 2004.

Ericsson provides IMS applications for push-to-talk, video sharing, video telephony, IP Centrex, IP telephony and IMS messaging. It also offers a full service creation environment, provisioning solutions, real-time convergent charging and single sign-on. The service creation environment is part of Ericsson Mobility World that includes a partner program and a large developer community. Ericsson provides handset software platforms and claims 30% market share for UMTS handsets. IMS clients are available on the platform.

The Ericsson IMS products are shown in table 4, the fixed and mobile IMS products share a common platform.

Table 4: Ericsson IMS products



Product Capabilities Engine Multi Media (EMM 2.0) IMS solution for fixed line operators IP Multi Media (IPMM 2.0) IMS solution for mobile operators IMS client Available on Ericsson Mobile platform Parlay gateway Provides secure third-party access to network resources Marconi IMS offering Impact IMS Session Controller XCD6000 series

Source: OSS Observer, Ericsson

IMS partners include Broadsoft and Hotsip, which was recently acquired by Oracle.

Ericsson is the leading supplier of IMS solutions and is well placed to retain that position. It has a comprehensive IMS offering for both fixed and mobile operators. As the market leader in mobile solutions it has the best solution delivery capability and sales channel for mobile IMS solutions. The recent acquisition of Marconi has significantly strengthened its offering for fixed operators. As CSPs move to consolidate their fixed and mobile operations Ericsson is well positioned to provide a comprehensive IMS solution.

Siemens Siemens is a diversified business with revenues in excess of $90 billion in 2005. Approximately $12 billion of this is from selling telecoms equipment, software and services to CSPs. This number excludes the handset business that was sold to BenQ during 2005. The telecoms business is approximately 60% from mobile networks and 40% from fixed networks. It is profitable with modest growth overall from 2004 to 2005. The mobile networks business is the main source of profit and growth. Siemens has been particularly successful with the UMTS NodeB product developed jointly with NEC. The fixed networks business has been particularly successful in the soft switch and VoIP segments with the SURPASS product line.

Key customers include Vodafone, TeliaSonera, KPN, France Telecom, and Siemens claim more than 35 IMS projects. KPN has a selected Siemens to provide VoIP, IMS and fixed mobile convergence across its operating companies. France Telecom has been testing the Siemens solution for fixed mobile convergence.

Siemens provides IMS applications for push to talk, presence and instant messaging. The solution includes interfaces for real-time billing and CDR collection.

Siemens major IMS products are listed in table 5.

Table 5: Siemens IMS products

Product Capabilities CFX-5000 Multimedia Session Controller (CSCF) CMS-8200 Home Subscriber Server including the User Mobility Server

for IMS subscriber information. hiQ 4200 Application server for consumer and business voice services. Application servers Application servers for instant messaging, presence, push and

talk and conferencing.

Source: OSS Observer, Siemens

IMS partners include Ubiquity and IP Unity.

Siemens provides a comprehensive IMS solution. Its strength on the fixed side with VoIP solutions positions Siemens well for the fixed IMS opportunity. It also has a strong position on the mobile side and is therefore well positioned for fixed mobile convergence.



Lucent Lucent made approximately $9 billion in revenues in 2005 for telecommunications equipment, software and services sold to CSPs. More than 90% of Lucent's revenue is in this segment. The business was profitable and showed modest growth of 4.4% from the previous year. Mobile networks generated more than 60% of revenues and grew 12% from the previous year. Lucent is the worldwide leader in CDMA equipment. Lucent's biggest customer is Verizon.

Lucent claims 7 commercial IMS deployments and 77 trials with 16 customers. Lucent is having most success in consumer VoIP and in fixed mobile convergence opportunities. It is also having success with enterprise VoIP applications. The major publicly announced customers are AT&T, BellSouth, Sprint, O2 and Cingular.

Lucent provides IMS applications for fixed mobile convergence, multimedia messaging, presence, location, push to talk, active phone book, IP PBX and gaming.

Lucent's main IMS products are listed in table 6.

Table 6: Lucent IMS products

Product Capabilities Lucent Session Manager Provides CSCF, service broker, service capabilities interaction

manager, policy decision function and breakout gateway function.

Lucent Feature Server Provides telephony services and support for FMC dual mode phones.

Lucent Communication Manager Provides single portal for wireline or wireless access. Includes access to voice mail, e-mail, instant messaging, buddy lists.

Lucent Network Controller Provides IMS compliant media gateway control function and signaling gateway function.

Lucent Unified Subscriber Data Server

Provides the IMS HSS function.

Lucent Active PhoneBook Network hosted dynamic address book. Lucent MiLife Application Server

Application server with service creation and customization tools.

Source: OSS Observer, Lucent

IMS partners include Ubiquity, Kodiak, Openera and Xten.

Lucent provides a comprehensive IMS solution for fixed and mobile operators. It is the leading IMS vendor in North America and is likely to be the main supplier of IMS solutions to most of the Tier 1 CSPs in this region.

Nokia Nokia finished 2005 with revenues of approximately $40.5. The majority of this is from mobile phones where Nokia is the worldwide market leader. Nokia is a major supplier of telecoms equipment, software and services to CSPs. This business generated revenues of approximately $7.9 billion in 2005; nearly all from mobile networks. It has a strong position in supplying GSM, EDGE and UMTS networks in Europe, Latin America and Asia.

Nokia claims commercial IMS contracts with 14 customers and trials with 18 customers. The major commercial successes are with Vodafone, Telecom Italia Mobile, TMN and CSL. The main application is video sharing, which has been launched as a commercial service by three operators. Nokia has major trials with France Telecom, TeliaSonera, Telecom Italia and Telkomsel. Nokia also claims 47 commercial PoC deployments and 16 commercial presence deployments.



Nokia provides IMS applications for video sharing, push to talk, presence, list management, IP Centrex, IP telephony and fixed mobile convergence. Nokia is in a particularly strong position with its influence over client platforms. It provides 18 mobile handsets which support a SIP stack and 10 of which have integrated video sharing capability.

Nokia's IMS products are listed in table 7.

Table 7: Nokia IMS products

Product Capabilities Nokia connection processing server

IMS CSCF capability on ATCA platform.

Nokia IP multimedia registry IMS HSS capability Nokia presence server Supports presence application. SIP clients Downloadable SIP clients for Symbian platform.

Source: OSS Observer, Nokia

Nokia IMS partners include Ubiquity and Hotsip.

Nokia provides a comprehensive IMS solution for mobile operators and is gaining ground in fixed mobile convergence applications. It has been particularly successful in the push to talk (PoC) market and will transition these customers to IMS. Nokia's strength in the mobile softswitch market is also a significant advantage.

Alcatel Alcatel offers a broad range of telecoms equipment, software and services for both wireline and mobile CSPs. Revenues from this business will be approximately $11 billion in 2005 with 55% from fixed networks and 45% from mobile networks. Its most successful market is DSL broadband access networks. The mobile business continues to grow, but the fixed voice business is declining rapidly. Overall Alcatel has strong solutions offerings in new growth areas such as IPTV, UMTS, IMS and VoIP.

Alcatel claims more than 20 IMS trials and deployments. Telefonica and France Telecom are running major trials of IMS applications using Alcatel equipment. BT is in the process of moving its BT Communicator service to IMS compliant Alcatel components. Alcatel also claims to have 70 IMS ready deployments with customers who have deployed Alcatel softswitches.

Alcatel supports IMS based enterprise VoIP services, consumer VoIP services and dual mode fixed mobile convergence. It has also integrated its IMS offering with IPTV to support integrated presence and voice conferencing.

Alcatels IMS products are listed in table 8.

Table 8: Alcatel IMS products

Product Capabilities Alcatel 5020 Softswitch Provides the serving CSCF functionality. In BT Alcatel

partnered with ACME to provide the proxy CSCF functionality.

Alcatel 1430 IP Multimedia-Home Subscriber Server

Provides HSS and SLF functionality. Can also provide HLR and AuC functionality or access an external HLR.

Alcatel 5350 IMS Application Server

Includes a presence server, client software, network based address book, group management capabilities. Can be used in non-IMS environments. Web development environment supporting SIP servers and Web services.

Alcatel 8690 OSP Application server for advanced hybrid applications (IN, SIP, etc.) & converged payment



Alcatel 8688 Media Resource Function

Audio and video announcement capabilities. DTMF detection, in-band and out-band.

Open Service Delivery Environment

Service delivery platform supporting IMS and other services such as triple play. 5350 application server is part of this platform.

Source: OSS Observer, Alcatel

Alcatel partners with Accenture and Cap Gemini for system integration of the service delivery platform.

Alcatel provides a comprehensive IMS solution for both fixed and mobile services. It will leverage its strength in the IPTV market to provide integrated IMS applications. Alcatel also has a strong SDP offering which will complement its IMS solution.

Other IMS suppliers All the leading NEMs provide IMS solutions. The current leaders are Ericsson, Siemens, Lucent, Nokia and Alcatel, but the market is in its early stages and relative positions could change considerably before the market matures. NEC, Nortel, Cisco and Motorola all have strong IMS offerings that will take a share of the market.

Telcordia, HP and BEA are major suppliers who have strong IMS products, but have chosen not to provide the CSCF capability.

Market definition and IMS background This section provides some background on IMS technology, standards and products. It also defines which products are included in the IMS equipment forecast.

3GPP IMS architecture and products 3GPP is the standards body that has led the definition of the IP Multimedia Subsystem. 3GPP have released a series of standards relating to all aspects of the evolving mobile telecommunications network. These have incrementally introduced IP technology into the mobile network. IMS was introduced with Release 5 in March 2002.

Some important releases are:

Release 99 - introduced the WCDMA radio access network and defined the interface to the GPRS packet switched network. With this release the circuit switched and packet switched networks remained largely separate, sharing only some of the mobility control infrastructure. The Open Service Architecture (OSA) was also introduced for service creation. The release was completed in December 1999.

Release 4 - introduced a common IP core network for both circuit switched and packet switched services. The circuit switched services are supported by MSC servers and MSC gateways. The release was completed in March 2001.

Release 5 - introduced IMS as the control plain for multimedia services based on the SIP standards developed by IETF. With this release voice services can be delivered over the IP network end to end from handset to handset. The release was completed in March 2002.

Release 6 - includes significant enhancements to IMS including interworking with WLAN. The release was completed in September 2005.

Release 7 - is still under development and will include voice call continuity between fixed broadband and cellular networks.



ETSI TISPAN is a separate standards effort focused on adapting the IMS standards to the needs of fixed line operators. It is expected that 3GPP Release 7 will include the TISPAN work.

The IMS architecture diagram is shown in figure 4.

Figure 4: IMS architecture from 3GPP and TISPAN

xDSL CableUMTS GSMCDMA PSTNWLAN

IP Core

HSS

CSCF

3G Mobile Dual Mode Fixed Access Legacy Voice

Circuit SwitchedMGCF+MGW

Service Layer

IMS Control Layer

Transport Layer

Access Layer

IMS Client Layer

Application Server

ISC/SIP

SIP

Diameter

Diameter

Presence, 3rd Party Access, Messaging, Location, Service Delivery PlatformService Delivery Platform

SIP SIPSIP

Source: TISPAN, 3GPP

Key components of the IMS are:

CSCFs - the serving CSCFs (call session control function) are at the core of the IMS layer. It routes the SIP signaling between SIP clients. It also downloads the user profile from the HSS and uses the filters defined there to route SIP packets to any required application servers. There are also proxy CSCFs that are the first contact points for clients and often handle the policy decision function and interrogating CSCFs that handle connections to other operators. All CSCFs use the diameter protocol to report charging information.

HSSs - the HSSs provides the permanent storage for user profile information. This is made available to both the CSCF and the application servers through a diameter interface. The HSS includes the HLR and AuC capability required for the mobile network.

Application Servers - this lies above the IMS control layer and provides the platform for additional services. Examples are presence, group list management, instant messaging, push to talk. Application servers use the SIP based ISC interface from the serving CSCF. SIP application servers, Parlay application servers and camel application servers are supported. Many services will also make use of the media resource function defined within IMS.



IMS Clients - many different hardware platforms can potentially support IMS clients. The client must have IP connectivity and a SIP protocol stack. The 3GPP standards include an IMS services identity module that stores user identity, security keys and administrative information.

MGCF and MGW - media gateways and media gateway controllers are included in the IMS architecture to provide interworking with the circuit switched networks.

The IMS 3GPP standards also provide specifications for real-time charging capabilities. Every IMS network entity can be configured to detect a chargeable event based on the content of SIP messages. Charging information is exchanged using the diameter protocol. An online charging system is defined so that service can be denied in response to the chargeable event. The standards also include an offline charging capability.

The service delivery platform shown in figure 5 is not part of the IMS standard, but will be an essential component in the rapid creation of new services that make use of the IMS infrastructure. The service delivery platform uses an IMS application server to execute the service logic that has been created.

An operator can enable third party service providers to use IMS capabilities in a secure and controlled fashion using the OSA framework. In the IMS architecture this appears as an application server.

Market definition

The OSS Observer IMS equipment market forecast (figure 2) includes spending by CSPs on the deployment of IMS standards compliant equipment. A deployment, which includes at least the CSCF, HSS and application server capabilities, will be counted in the forecast. The forecast itself includes spending on CSCFs (serving, proxy, interrogating), HSSs, application servers, policy control functions and other IMS equipment. It excludes media gateways and media gateway controllers and IMS clients.

Figure 5: OSS market segments



OS S Obs erver Market S egments

B illingS erv ice

as s urance

S erv ice management

Fault & event management

P robe s y s tems

P erformancemonitoring

R ating & P ric ing

Interconnect

Mediation

R eal-t ime charging

Fraud & R evenue As s urance

Cus tomer careS erv ice

fulfillment

CR M

S ubs criber management

Cus tomer interaction

Workforce automation

Order management

NR M/Inventory

Act ivation

E ngineering tools

Netw ork E quipment Manufacturers E lement Management S y s tems

Component Integration S oftware


B illingS erv ice

as s urance



P robe s y s tems


R ating & P ric ing

Interconnect

Mediation




fulfillment

CR M




Order management

NR M/Inventory

Act ivation

E ngineering tools


B illingS erv ice

as s urance



P robe s y s tems


R ating & P ric ing

Interconnect

Mediation




fulfillment

CR M




Order management

NR M/Inventory

Act ivation

E ngineering tools

Netw ork E quipment Manufacturers E lement Management S y s tems

Component Integration S oftware

Source: OSS Observer

The OSS Observer forecast for OSS spending related to IMS (figure 1) includes spending on all OSS functional areas (figure 6) which are specifically driven by these IMS deployments.

IMS related standards Standards closely related to IMS:

Parlay - has driven standardization of the service creation environment and the infrastructure to enable third parties to provide services. Have provided the basis for the OSA standard in IMS.

Open Mobile Alliance (OMA) - drives standardization of mobile service enablers. Has established a push to talk over cellular standard (PoC) which can use the IMS infrastructure. It includes separate application servers to support presence, group list management and the push to talk service.

TISPAN - an ETSI working group that is driving standards for the use of 3GPP IMS capabilities in a fixed line environment.

Recommendations CSPs are presented with some long-term organizational challenges with the operation of an IMS network. To obtain the full value from IMS it must become the single control layer for all access technologies. This will require the merging of network operations, customer care and billing organizations that have historically been separate for the different technologies. The approach should be a pragmatic one; deployed IMS for a specific service, develop the business processes to support it and then roll these out through the organization.



Early investment in real-time convergent billing will be essential in the competitive battle with the best efforts providers such as Google, Skype and Yahoo. CSPs have the opportunity to use bundling and tariffs to make IMS services more attractive than the best efforts competitors. TMN in Portugal has shown early success with IMS based video sharing by targeting families with a bundle including multiple handsets and attractive voice and video tariffs.

CSPs must move towards multiservice OSS solutions to control the cost of operating IMS based services. This means developing a strategy for standardizing on horizontal functional solutions for each of the major OSS areas and avoiding where possible short-term technology specific solutions. Functions like order management, activation and network resource management must be common across the different access technologies and services.

The customer experience for IP multimedia services will be critical to the success of IMS. CSPs must invest in the service assurance capabilities to manage the customer experience. This means early investment in probe-based solutions to monitor and measure customer experience. Longer-term, CSPs will need to invest in a horizontal service management capability.

OSS vendors must put together a coherent strategy for IMS support now and communicate it to the market. However, IMS will not drive significant revenues until late in 2007 for most OSS vendors; real-time convergent billing being the exception.

The major OSS vendors must select their target for the horizontal multiservice functionality they wish to own. The choice for most vendors is reasonably clear, but IMS will change the OSS landscape in certain areas. Activation for example becomes less about specific network technologies and more about breadth and scalability. Many billing functions move to near real-time and become more closely tied to the network. Service management will be more closely tied to the service delivery platforms. Vendors must consider these long-term changes.

Smaller OSS vendors will not have the critical mass to own a major horizontal functional area and will need to align themselves with vendors who can. There will be opportunities for innovation in a number of areas; including monitoring the customer experience for IP multimedia services, network planning and performance management and service modeling.

Published by OSS Observer LLC PO Box 1319 Sugar Grove Illinois 60554-1319 Tel: +1 630 466 9223 Fax: +1 630 566 3863 Email: [email protected] site: www.ossobserver.com 2006 OSS Observer LTD All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any other means - electronic, mechanical, photocopying, or recording or by any otherwise - without the prior written permission of OSS Observer LLC. OSS Observer LLC maintains that all reasonable care and skill has been used in the compilation of this document. However, OSS Observer LLC shall not be under any liability for loss or damage (including consequential loss) whatsoever or howsoever arising because of the use of this document by the customer, his employees, contractors, agents or any third party.




Executive summary Market Forecast Commercial OSS forecast for IMS equipment and related services

IMS DefinedIMS servicesExamples of IMS based services:IMS architecture and products

Market driversMarket driversMarket inhibitors

DriversEnable new multimedia servicesRapid, low-cost deployment of new servicesFixed mobile convergenceCommon IMS coreDifferentiate from "best efforts" service providersAll IP networkStandardization Third-party services

InhibitorsCompetition from bit pipe operators and "best effort" servicesIMS client availability and usabilityCompelling IMS applicationsInteroperability issues

Business EnvironmentIMS precursorsPush to talk over cellularVoice over IP in the fixed networkMobile softswitchesFixed mobile convergenceSDPReal-time convergent chargingOSA/Parlay IP quality of service

IMS trials and contracts

OSS requirements and implicationsBillingConvergent billing systemReal-time convergent charging and ratingCustomer visibility of accountRapid low-cost service creationHighly available systemPartner settlement

Customer careMultiservice activationCommon network resource managementIP quality of service planning tools IMS client management

NEMs network management solutions

IMS Solution SuppliersEricssonSiemensLucentNokia AlcatelOther IMS suppliers

Market definition and IMS background3GPP IMS architecture and productsMarket definitionIMS related standards

Recommendations

Documents

IMS_Outlook_Mar06.pdf