IMS

Operators look to more effective traffic analysis and management

O2 has been deploying DPI for traffic analysis (and possibly management) in its upgraded 7 Mbps upgrade to 3G, and some of the information the company has gained could have a significant impact on 3G/4G planning worldwide.

The company found, not surprisingly, that 5% of users consumed 80% of bandwidth. This skewing of the old 80-20 rule is one of the primary reasons why operators say that some form of traffic management is essential to insure that the broad population gets good service at a fair price. The data also shows that most usage is in the evening and at home, however, which means that femtocells would offload considerable traffic were they widely deployed.

Many operators tell us that while 3G femtocells are possible, the application of IMS and 4G would make it far easier, particularly if self-organizing principles were applied to cell setup. How valuable all this intelligence will be may depend on regulatory trends, though; many countries are seeing considerable public advocacy pressure against traffic management.

Google’s Wave: Early assessments a bit “off”

Google’s Wave is gathering a lot of comment, but in our view, much of it is missing the key points about the notion. Part of that problem lies with Google’s own positioning of Wave, which some believe may have been rushed into public view to overhang Microsoft’s Bing announcement. We’re not so sure.

This month in our Netwatcher newsletter we’ll be taking a look at Wave, and we’re offering a short TMT Advisor Planners’ Briefing for those who registered for the service.

Wave is an architecture, not a replacement for email or even IM, as some suggest. It is the first example of a rich, federated, OTT service, and as such it could be a total game-changer for everything from unified communications and collaboration to IMS, TMF, and ITU NGN.

Does Google get all of this, or are we just being an alarmist? That’s for the future to determine. Meanwhile, we recommend everyone take a very hard look at the true details and not base their perceptions on the coverage.

Voice over LTE models challenge vendors/operators

The impending LTE rollout is creating questions about how voice will be handled, and the answer may have a big impact on the fortunes of vendors. There are three basic approaches being proposed by some operators: IMS/VoIP, using the 2/3G network for voice and 4G for data only (multimodal handsets), and a circuit-over-IP architecture called Voice over LTE via Generic Access(VoLGA).

Obviously the IMS approach would favor the big telecom equipment vendors while the others might admit a broader range of bidders. We’ve heard many operators voting for the fallback-to-3G approach because it would make handset transition easier since current smartphones could continue to operate on the current network, but there are potentially spectrum and cell issues to be resolved.

Skype IPO could be worst-case for telcos

eBay will be spinning Skype off in an IPO in 2010 instead of selling it to its founders. As we had suggested, the founders could not meet the price eBay hoped for, due we’re told to the reluctance of private equity firms to back the transaction.

An IPO for Skype could create a kind of worst-case scenario for telcos and for IMS supporters by almost guaranteeing a flurry of OTT voice services that would force down pricing and margins, at a minimum. We’re of the view that the current central-administration PSTN-like model (including IMS) will be more difficult to sustain with OTT competition unless IMS can be expanded to provide better support for so-called Web 2.0 applications and unless it is opened to more developer innovation.

A number of vendors have committed to this, notably Alcatel-Lucent, but so far no one has completely delivered. Alcatel-Lucent’s Web Services Gateway is a step in the right direction but not a complete solution. Voice competition by Skype and others could also impact ROI of the telcos further, particularly in the mobile space where call costs are still relatively high, especially for roaming and international calls.

Wireless operations costs explode with 4G complexity

Even in the wireless space, network operators are becoming concerned about the growth (nay, explosion) of operations cost arising out of the complexity of their networks. In a recent interview, AT&T wireless head de la Vega said that the company didn’t want hyper-complexity to accompany hyper-connectivity.

We are seeing increased operations concerns on the wireless side, where in the past this focus was largely from wireline operators. One reason is the concern that the transition to 4G will create a major problem with interworking of the new and old plants, and another that attempts to promote premium services and premium handling for mobile calls (via IMS) will be difficult to operationalize. IMS does not contain management standards, and management standards bodies have made relatively little progress moving standards that would be suitable for consumer-level mobile services management.

T-Mobile to shake up prices; pressure mobile market

T-Mobile may be about to launch the Great Mobile Price War, with dramatic consequences for the whole market. The company is expected to announce a $50 per month unlimited usage plan, undercutting competitors by half and potentially further pressuring the monetization model for mobile services.

The issue here is a familiar one: Feature differentiation in voice and mobile services has not been successful in luring customers, and so price is the only option. Generally those with smaller market shares and thus more to gain are early movers in price cuts, and T-Mobile fits that mold.

If the company also links in premiums related to its FMC offering, the result could be to force operators to reduce costs and advance their FMC plans. That, we believe, might actually hurt 4G, IMS and traditional approaches simply because it constrains ROI and focuses on shorter-term objectives.

P2P/BitTorrent fall on hard times

P2P may be falling on hard times in at least one sense; BitTorrent confirmed a 20% layoff but said the move had nothing to do with the Comcast throttling issue. In some ways it would have been better for the company had Comcast been the culprit, since the FCC has ruled that Comcast can’t strangle a particular type of traffic.

We believe that the real problem is that there is little BitTorrent can do to rehab the image of P2P, which our research and modeling shows is used for illegal file sharing in more than 90% of cases. It’s ironic the giant of P2P is now suffering, given that the telcos are at the same time looking at P2P signaling architectures as an alternative to centralized signaling systems like IMS. Recent rumors say that operators are researching the use of a P2P architecture for delivering “rich service signaling” without the need for a central signaling system and without the limitations of SIP/SDP/IMS.

Common P2P architecture could threaten IMS

A number of developments, especially a rumored suggestion of cooperation among 15 common carriers to produce a P2P-model IMS-competing, voice-over-IP architecture that would be open to developers, suggest that the telco space is shifting its view of the future to accommodate the death of voice as a profit engine and the need to develop connections with the web community to create richer applications. While the move is hopeful, it is also a major culture shift for the operators and perhaps most especially for the equipment vendors that support them. We’ll be looking at equipment vendor views on open software platforms and programs while at NxtComm this year, and we’ll report on the results.