Messaging and SMS are not typically considered major sources of bottlenecks or capacity management issues. But the diversity of networks that support messaging and growing competition over high-use subscribers may force operators to consider near-term investments in their network stacks to protect the long-term investment they already have.
When Tekelec recently published its white paper, "MM3.0: the Future of Messaging," it challenged service providers to consider requirements evolving through 3GPP, and to be prepared for these challenges.
Industry analysts from firms such as ABI Research, Frost & Sullivan’s Stratecast, and OMNI Consulting agree that the time is now to think about the future. The messaging market is profitable for carriers now, but service providers may have to make adaptations in their business models to become or remain competitive.
Most if not all high-usage customers are subscribed to "all-you-can-eat packages." In order to grow the industry further, more affordable options will have to emerge through competition, and ultimately, accurate usage-based billing will be required. Most networks are not built in such a way that they could report newly defined subscriber transactions into an existing billing system. That alone is forcing carriers to consider what kind of investments may be required to cope with capacity, quality, and expense.
While some can take the business of messaging for granted, and count on this bread and butter business, other service providers have expressed more interest in IMS, 3GPP, and other network management tools to manage bandwidth more efficiently, according to David Mangini, Global SDP Solution Owner for IBM's Telecommunication Industry.
With data demand growing quickly, and network capacity becoming increasingly critical for operators to remain competitive, operators will turn to IMS to help address the efficient management of bandwidth demands from mobile messaging.
There are many more networks without IMS than there are with it. For five years now, IBM has made its telco hardware IMS and 3GPP compliant with the expectation that operators would implement advanced messaging protocols through new frameworks.
But network operators have not clearly shown a willingness to invest in upgrades that may become necessary to protect and extend existing network investments. The challenge lies in the business process and policy decisions that operators must consider in order justify new investments.
Where Tekelec's white paper explores the messaging industry, it posits that the launch of the iPhone, app stores and social networks (SNs) have accelerated mobile data usage and will most likely impact MNO messaging revenues.
For MNOs that already support the iPhone, according to the report, statistics on data usage are staggering. One European operator conveyed that average mobile data usage among iPhone users in 2008 was 30 times that of subscribers with other types of phones.
Mangini, whose unit at IBM specs hardware frameworks for service providers and supplies middleware, said the challenge is present in many aspects of network service delivery. "This is across the board, it’s not just messaging."
In building stacks and supporting network operations, Mangini sees first hand where challenges arise because the network’s performance and the revenue growth opportunities can be very dependent on the processes that the service providers have built.
He said the operator should consider implementing an IMS framework to handle these complexities both for the benefit of the subscribers, and to work more directly on the business logic, billing, and support systems that must interact in real time. "IMS functions around policy management are going to become important. For unique users," he said, "balance management, transaction management and policy management can be achieved more effectively by leveraging the capabilities of IMS."
Despite some chatter, Mangini said operators have not significantly changed the perception that they have been dragging their feet on IMS for several years.
Industry analyst Frank Bernhard, Managing Principal from OMNI Consulting, was also cautiously optimistic. "I would agree that the’re picking up their shuffle."
But he, like IBM and Tekelec, would encourage the providers to become even more proactive, and less observant.
"The future is now," Bernhard said. "If you’re not prepared for it, you’re gong to miss it."
Operators need to take a look at their networks now in terms of what IMS can provide in its ability, and to see what’s down the road. "If you need to ride that wave, you need to make your move at the right time."
The greatest indicator that the tipping point may be near, according to Bernhard, is seen in the concentration of IP switching that operators have embedded in the core. Between 2006 and 2009, he said, there was a 38 percent increase in IP-based core network switching.
This lifted IP witching above the 50 percent threshold, reaching approximately 60 percent of all switching. If this is not critical mass in the march toward all-IP networks, then it may come soon.
At this time, Bernhard said, "Each operator needs to assess the relative span of IP influence, and ask how close to the core is your IP strategy?"
At the very least, Bernhard said, growing conern over network capacity and effective subscriber transaction policies are pushing the philosophy faster that lead to the development of IMS.
Operators should ask themselves what it will take to truly deploy and support the kind of personal on-on-one network that everyone has dreamed about for years. If messaging services aren’t open and shared with third parties, operators risk losing relevance in their networks. If those services aren’t secure and easy to use, easy to add and remove from a subscriber’s portfolio, operators are exposed to even greater risk.
"If we don’t look at policy and controls in place, we’re going to lose the trust of the people who are paying the bill," Bernhard said.