Informa Telecoms & Media predicts that the market for Global IMS equipment is expected to reach US$8.3 billion in 2012, less than 3% of the total telecoms infrastructure CAPEX. So why are network equipments vendors beating the IMS drum so hard to the point that they are now accused of raising expectations beyond what the technology can deliver? The reasons are strategic.

In an era where operators are preparing to embrace all-IP networks, IMS has emerged as the de facto service and control architecture of choice to support these networks. Although the market for IMS equipments will enjoy remarkable growth over the next five years, operators’ investments in such equipments will remain weak and will represent only a small fraction – 3% -of the global Telcos’ CAPEX. Indeed, revenues from mobile IMS equipments are unlikely to exceed US$4 billion by 2012 while these from IMS equipments for fixed and fixed-mobile convergence applications are expected to generate just US$4.3 billion according to the new report.

So far operators are in various stages of adoption: issuing request-for-proposals (RFPs), undertaking lab trials and interoperability tests, and even launching early IMS services. Operators will not adopt IMS on a larger scale until early services prove successful and IMS technology delivers on its promise.

In contrast, the leading network equipment vendors (NEVs) continue to consider IMS as an important element of their strategy despite the fact that the bulk of the big contracts have still to be issued and the scale of IMS deployment has yet to emerge.

There are many reasons why IMS is strategically important for NEVs:

Firstly, given the complexity of implementing next generation networks(NGN) and related services, the integration of IMS will enable product differentiation and the sale of fully integrated end-to-end  systems. Malik Saadi, Principal Analyst and author of report IMS Services: Fixed, Mobile & Convergent Revenue Opportunities says “Using IMS, vendors with a broad product portfolio such as IPTV, VoIP, broadband access, wireless networks infrastructure, optical networking, and routing are well placed to bid from more lucrative next-generation network upgrades”. This strategy will enable them to build stronger ties with the operator which will put them in a stronger position for potential network upgrades and expansions in the future.

IMS will also create new windows of opportunities for the major vendors in the enterprise segment and will enable them to better position themselves to compete in this market. “Platform sales are only one consideration for system vendors. IMS is also strategically important for NEVs because it could potentially lead to lucrative managed services contracts with the operator” Malik Saadi says. Operators are looking increasingly to vendors to manage their networks because enabling technologies for next generation networks and services are complex to manage. Players such as Ericsson, Huawei, Alcatel-Lucent, and Nokia-Siemens are already keen to grow their managed services’ businesses, and the implementation of IMS is likely to enable them to grasp more opportunities in the networks managed services market.

More specialist vendors will have greater opportunities among operators with legacy networks who want to adopt IMS on a step-by-step basis. However, even though many of these operators may not actually be keen to procure a complete system from a single vendor, it is very likely that some early adopters will tend to favour the broad IMS portfolio vendors for the benefits of having greater overall control and the ability to tweak the IMS network as a whole if needed. “More specialist vendors must be cautious as IMS’s likely lengthy deployment roadmap is more of a risk for them” warned Malik Saadi “For that reason they have to arm themselves with strong partnerships with the leading integrators and generalists among NEVs to ensure the interoperability of their products within the whole IMS ecosystem” he added.
www.informatm.com/imsreport