Frost: Convergence to Drive Demand for IMS Deployments

The trend toward convergence of mobile and fixed line telecommunications as well as the need for operators to boost ARPU is likely to drive the deployment of IP multimedia subsystem (IMS) infrastructure in Latin America, US consultancy Frost & Sullivan said during a webcast.

According to Frost analyst Eduardo Dubin, IMS allows operators to build specific commercial promotions such as push to talk, gaming or other multimedia services for a particular season during the year and then dismantle them.

IMS "allows services to be easily torn down," meaning a failed service will not result in a high investment for the operator as they can remove them as quickly as they set them up.

In addition, the industry watchdogs in several countries in the region are introducing regulations that encourage converged services such as triple play, which in turn opens up new opportunities for IMS.

Frost expects sales of IMS infrastructure in Latin America to grow at an annual rate of 36.2% from US$97.9mn in 2005 to US$624mn in 2011.

IMS is the framework used to deliver IP applications to the end users of an operator's network. The system allows an operator to deploy more personalized value added applications on their network to subscribers to boost ARPU.

Over the next five years more operators will likely shift their business strategies away from cost reduction to revenue generation through new services.

IMS solutions can be broken down into several main categories such as the media gateway, softswitch, application servers and the media server. Frost expects the highest growth from sales of media gateways and softswitches.

VENDORS PERSPECTIVE

Three equipment providers currently dominate the IMS market in Latin America: Germany's Siemens, China's Huawei and Canada's Nortel. For small vendors, the market is extremely difficult to enter, Dubin said.

"Most operators are still very cost conscience and want to perform a lot of tests with several different vendors [before committing themselves]," Dubin said.

Furthermore, operators are likely to look for one vendor that can provide a comprehensive solution instead of going to several vendors to put the solution together. This is especially so with some of the regional operators who are looking to deploy infrastructure in several different units."

Posted to the site on 18th April 2007