|Issue:||Latin America 2006|
|Topic:||IP convergence: is IMS just more hype?|
|Title:||Vice President Sales and Marketing, Caribbean and Latin America|
René Méndez is UTStarcom’s Vice President, Sales and Marketing for the Caribbean and Latin America. Prior to joining UTStarcom, Mr Mendez held management positions in operations and strategic sales in companies such as Zhone Technologies, Lucent and Racal Datacom. During his career he has developed start-up operations for Zhone, Ascend, Cascade and UTStarcom, and has managed sales for USA, Asia and Europe. Mr Mendez studied Electronics Engineering at the Florida International University and has an Associate Degree in Art and Sciences from the Miami-Dade Community College.
IP Multimedia Subsystem, IMS, and IP convergence let Latin America’s operators offer advanced services, including fixed-mobile convergence, FMC, and enhance customer loyalty. IP makes the convergence of services possible; IMS provides the framework for developing and delivering new services across any type of network to any type of device. IMS fosters competition through the speedy development and deployment of new services. IMS facilitates the seamless integration of the Mobile Virtual Network Operators’ own services on the networks of existing operators.
Service providers worldwide know that capturing the loyalty of Latin Americans now requires more than just promises. Operators are thus desperately looking for new ways to not only entice customers, but also retain them. Two of the hottest topics in the telecom industry today, IP Multimedia Subsystem, IMS, and IP convergence, offer a solution to this problem. Operators can deploy them in the ever-growing Latin American market in the years to come, to offer advanced services such as fixed-mobile convergence, FMC, that will enhance customer loyalty. Reality check The growth of the telecommunications market in Latin America has not stopped since the 1990s, when state governments in Chile, Argentina and Brazil pushed to privatize services. In some cases, the services’ former inertia has imposed leapfrog changes in technologies instead of planned migration. In the cellular world, for example, some service providers are thinking of moving from technologies such as CDMA IS-95 to IP-CDMA or even of going all the way to W-CDMA. The providers reason that these changes will let them increase average revenue per user, ARPU, and minimize subscriber churn, while remaining ready to take advantage of new opportunities as they arise. Latin America is, by tradition, a market full of adopters of new technologies such as WiMAX. WiMAX, which little by little has been gaining ground, was developed to satisfy the hunger for wireless broadband and ubiquitous access to IP networks while providing new revenue streams for incumbents and new multi-service operators, MSOs. Customers in Latin America know that such options are available and that they offer better prices and, probably, better services. Customers also understand the revamped concept of calling cards, which a few years ago were directed at a small market, leaving most customers with no other option than to pay super-high long-distance voice tariffs to call relatives or friends around the world. In the last five years, this situation has opened a huge market for new Next Generation Network, NGN, operators – and imposed or accelerated changes in the infrastructure of the incumbents. Once again, the customer is driving changes in the market. Nowadays you can see more often a grandfather using his high-speed cable access to place a VoIP call from Rosario, Argentina, to his granddaughters in south Florida while simultaneously downloading the latest pictures from his son in Caracas, Venezuela. Fortunately for Latin America, the most disruptive of all changes – the use of IP as the panacea for their problems – was part of a natural change or evolution for most operators. This situation is very different from other markets, such as North America, where operators have spent billions of dollars on technologies such as ATM, Asynchronous Transfer Mode. In these markets, a change to IP implies a lot of re-thinking, new investments and new strategies, such as mergers. These conditions have attracted European and North American operators to make enormous investments in Latin America. Even top-notch local operators such as TELMEX are expanding their footprints across the region, getting ready for the real battle, the convergence of services. IP without any doubt will make the convergence of services a reality. Technologies have been evolving, one after the other, around IP, including NGN, IP-CDMA, WiMAX, IPTV, xDSL, CMTS, and so on. The IP framework they are based on is also growing and adapting to the point where it can be thought of as the next leap to new technologies. The fact that all these technologies can coexist under one single infrastructure means that imagination is the only limit to the possible services that operators can provide. Using each technology as part of a multi-billion dollar puzzle, operators can get off to a great start by putting together the right ingredients in the right proportions for the right recipients. Most telecom operators have adopted IP as the mainstream of communications of their networks. Competition in the wireless, wire line and data markets is fierce; all operators are investing millions of dollars in marketing campaigns to decrease churn and to develop new products to bring to the market, and customers are educated enough to look for good, inexpensive products to fulfil their needs. IMS – the new panacea Considering all of today’s technologies, the one that will have the greatest impact in Latin America will most likely be IMS. All the conditions needed to make IMS a success are present. 4 High-speed access – Reports show a sustained increase in broadband in Latin America, not only with xDSL technologies, but also with CMTS, cable modem termination system – broadband access via cable TV and EVDO, EVolution-Data Only – broadband CDMA – in some markets. 4 A large number of wireless and NGN operators – The number of operators in Latin America has grown to the point where mergers and takeovers have recently been in the news. 4 Expansion and upgrades of cable networks – Cable operators in Latin America are going after more revenue from their formerly captive customers. A very significant number of cable operators have upgraded their networks to provide not only digital video but also voice and data. For political, economical and social reasons, the number of wireless customers in Latin America is growing at a pace that few operators can deal with. Additional concerns are current network expansions and imminent upgrades that will slow the process of delivering new services. These conditions require a re-thinking of current networks and services. IMS by definition is no more than a framework that will provide the means for developing and delivering new services across any type of access network to any type of device. In the case of voice, IMS takes the best from IP and SIP, session initiation protocol, to break apart the hegemony of proprietary and vertically integrated network systems. As a result, the new generation of operators and Mobile Virtual Network Operators, MVNOs, will have new open interfaces and application servers, AS, that will enable them to integrate these systems seamlessly. The big difference between IMS and previous new revenue-generating services is that IMS is not just a single killer application. IMS is a framework, an enabler of services and new killer applications that are just waiting around the corner ready to be developed and integrated based on customer needs. IMS will substantially reduce the development time and implementation cost of these applications by providing a single platform for service provisioning across multiple network technologies. Who is IMS for? The IMS architecture does not just benefit one type of operator, it benefits them all – wireless, wireline, cable and NGN operators alike. IMS will allow big incumbent operators with both wireless and wireline operations to focus on market sectors or niches, possibly through their own MVNO-like service offerings. IMS will allow medium-size wireless operators to join forces with NGN or cable operators to provide services across the board. Bottom line, end users will be able to take advantage of flexible gear to improve their communication experience, because this will fit their demands as NGUs, Next Generation Users. In other words, IMS will do a number of things: 4 enable competition among incumbents and new entrants; 4 decrease time to market; 4 speed up development time; 4 allow easier – if not seamless – third-party integration; 4 enable personalized service offerings; and 4 provide transparent services integration from different service providers. IMS with all its bells and whistles will not be ready until 2010, but IMS services are already available to operators in Latin America for deployment. Also available now is FMC, which allows wireless and wireline/cable operators to interface through an AS to provide seamless connectivity when switching from one network to the other. In this kind of application, the customer’s gear is a dual-mode phone (CDMA/GSM and WiFi) that permits communications either via the subscriber’s mobile telephony network or via WiFi. In addition, vendors and manufacturers are already providing IMS-ready equipment, thus guaranteeing future expansion towards IMS. Summary IP convergence, in this case IMS, offers incumbent providers new ways to deliver services that are simply too expensive to deploy by themselves. For MSOs, IMS represents a way to compete in a provider-saturated market. For customers, IMS will result in end-user equipment that is more flexible, so subscribing to a new service will not necessarily mean buying a new, more expensive device. The Latin American telecommunications market is an excellent starting point for IMS for several reasons: 4 the variety of technologies deployed in Latin America during recent years; 4 the continuous growth in the number of broadband ports, including CMTS, XDSL, EVDO, GPRS, EDGE, WiFi, and WiMAX; and 4 major players with multi-protocol label switching/quality of service, MPLS/QoS, ready networks. Success is not guaranteed, however. Success will depend not on technological capability, but on how the message is conveyed to customers, on how well operators understand customer needs, and on applications. These three factors are critical if service providers are to deploy what customers demand and not what they think customers want.