Mutual Assured Profitability

For equipment suppliers, a similar situation exists. The Alcatel-Lucents, Ericssons and NSNs of the world will live to see the day after tomorrow even if their millions of dollars in investments they’ve made in IMS and SDP never show a return. These companies can continue to duke it out by selling infrastructure gear, such as base stations, DSLAMs and routers, at low-margin prices. It’s a living, even if it isn’t easy street, which can only be reached by evolving their product lines to high-margin software, such as IMS and SDP components.

So, if the future profits of both operators and equipment makers depend on the success of IMS and SDP, what’s the hold up? Why are IMS and SDP sales hovering at sea level instead of blasting through the stratosphere?

The answer to those questions is as old as the chicken and egg riddle. As much as operators are jonesing to overhaul their service delivery infrastructures, they won’t disturb a single database until they have a near-guaranteed revenue stream – in the form of new services – that will pay for any infrastructure improvements. The tragic irony, of course, is that it’s essentially impossible to roll out a newfangled service, with all the bells and whistles that IMS and SDP promise, without first investing in an IMS- and SDP-based network.

The standoff cannot continue much longer. The forces of MAP must be strong enough to break the logger jam. Operators and equipment makers will need to meet half way. Vendors have already started to take the costs out of IMS deployments through strategic bundling of components, wring costs and complexity out of the deployment. In addition, equipment makers are working together with carriers to introduce IMS-like applications that can give subscribers a taste of personalized and blended services.

Now it’s up to operators to make a move and obliterate the wall of resistance to infrastructure investment that was erected after the bursting of the telecom bubble.

C’mon, Mr. Operator, tear down that wall.