a holistic and best practices approach to ims rollout (2008)

IP TRANSFORMATION CENTERPartnering for change

A ‘holistic’ and ‘best practices’approach to IMS rolloutMarc JadoulParis, 22 April 2008.

All Rights Reserved © Alcatel-Lucent 20082 | IMS 2.0 World Forum | April 2008

IP Transformation and IMS RolloutWhy Do Service Providers Need to Transform ?

Source: the Yankee Group, Alcatel-Lucent

Low return (RoA, RoI) due to ‘legacy’ & ‘proprietary’ infrastructure.Limited innovation capacity due to network silos & heavy processes/IT.

Traditionele telecom service providers

New market players(Google, Yahoo, eBay, ...)

Market Cap/Revenue

EV/PPE OPEX/Revenue CAPEX/Revenue

< 3

> 8

< 5

> 53 < 47%

> 62%

< 10%

> 18%

RoA = Return on Assets; RoI = Return on InvestmentsEV = Enterprise Value; PPE = Property, Plant, Equipment

Source: service provider reports, Morgan Stanley

‘Legacy’dominates

revenue mix

~ 55 %

~ 45 %Growth

Legacy

Revenue Mix

Low margins onnew services

~ 75 %

~ 25 %Growth

Legacy

EBITDA Mix

+2000 2002 2004 2006 2008

35 %42 %

Impact onEBITDA margins

=(~ 2- 4 %) YoY

Fast erosion oflegacy revenues

*Legacy revenues


0000 €

1000 €

2000 €

3000 €

4000 €

5000 €

2005 2006 2007 2008 2009 2010 2011 2012

10%

2005 2006 2007 2008 2009 2010 2011 2012

15%

20%

25%

30%

35%

40%

45%

Target scenario

Baseline scenario

Target scenario

Baseline scenario

Revenues (M€) EBITDA margin (%)

Case Study*An European Incumbent

Environmental impact from:

Price erosion• Competition Take rate

Customer churn• Regulation• Internal/external costs evolution

Transformation impact from:

• Service delivery (NGN/IMS/SDP)• New services/bundles (VoIP, IPTV,

multimedia, blended)• Network transformation (All-IP)• Process re-engineering and NG OSS/BSS

(*) business case simulation based on anonymized service provider reports, analyst data and extrapolations of the former


Case Study* Impact of Transformation on the Business Results

Impact on revenues Impact on EBITDA

71%

29%

64%13%

6%

17%

Transformation impact from:

Service delivery (IMS/SDP/SDE)

New services/bundles (VoIP, IPTV, multimedia, blended)

Network transformation (All-IP)

Process re-engineering and NG OSS/BSS

(*) business case simulation based on anonymized service provider reports, analyst data and extrapolations of the former


A ‘Holistic’ ApproachTransformation is No ‘Business as Usual’

• Strategic network transformation• Cost control & investment protection• Managed end-to-end QoS/QoE• Global IP transformation project

• Customer-centric services• ARPU growth• Margin protection

Costs

Time

OpEx

CapEx

QoE

Transformation approach

• Tactical infrastructure upgrades• Unchecked/uncontrollable TCO• Poor user experience• Technology & operations “stovepipes”

• Increased churn• ARPU erosion• Pressure on margins

Time

Costs

OpEx

CapEx

QoE

Upgrade approach


Wireline

New Services/Bundles

SDP/SDE & NG OSS/BSS

IMS

IN & Telephony Apps

Fixed Mobile Convergence

Class 4 & 5 NGN

Legacy Data Services

IP Core

High Speed Access

Business/Consumer VoBB

Wireless

New Services/Bundles

SDP/SDE & NG OSS/BSS

IMS

IN & Telephony Apps

Tandem & Class 4 NGN

Fixed Mobile Convergence

End-to-End VoIP

Distributed R4

IP Core/Backhaul

High Speed Access

A ‘Holistic’ ApproachTransformation Occurs at all Layers of the Network

Applications

Call/SessionControl

IPMultiservice Edge

IP/ MPLSCore

Transport

Consumer

Enterprise

Access Networks

PublicInternet

Voice

Video

Content

Data

OSS/BSS

DataCenter

PSTN/PLMN

Convergence


A ‘Holistic’ ApproachIP is a Means, NOT the Target ...

Services

• ROI on broadband access • New customers, higher ARPU• Enhanced ‘user experience’

Operations

• Time-to-market• Cost reduction• IT, processes & organization

Network

• Common transport layer• Ready for multimedia• Getting rid of “stovepipes”


A ‘Best Practices’ Approach Network Transformation

“Less is more” and “simpler is better” …• Regain economies of scale and allow cost synergies• One single multi-service network, without (network & service) silos

… but don’t under-estimate end-to-end complexity

• “Standards compliance” is not always a synonym for “interoperability”• Understand the legacy before designing the next generation• Work with a prime Network Integrator to manage technology, solution

architecture, project and multi-vendor interdependencies

QoS is more than “bits per second”

• It’s the overall quality of the end-user experience (QoE) that matters• Invest time & money for upfront QoS/QoE design, testing and validation• Always develop and evaluate the service against well-defined KPI/KQIs

Inter-working is a business decision, not a technical one

• Inter-working with PSTN and peering with VoIP are hard requirements• Don’t (mis-)use SIP for what it was never intended for• Security, QoS and inter-carrier roaming and settlement need to be

covered by end-to-end IP peering scenarios


A ‘Best Practices’ ApproachServices Transformation

Avoid the voice feature parity/transparency trap• A service portfolio based on “differentiation” instead of “continuation” will

minimize R&D costs and and maximize revenue potential• Synchronize with marketing & sales early in the project to challenge

features and to quantify costs, risks and benefits of approaches• Work closely with vendors to communicate your priorities and expectations

“Plain Vanilla” services are not enough• A well designed SDP will allow to smoothly ramp-up move from voice

to converged, blended and personalized services• Three activities not to neglect: MARKETING, MARKETING, and MARKETING

IMS is a great framework for design and delivery• Appoint Solution Architects to maintain integrity of the architecture• Adopt a consistent set of R&D practices and an efficient delivery organization • Get organized for a dramatically shorter SLC: weeks instead of 12-18 months

IMS should not be deployed in isolation• Launch new services bundles combined with a portfolio rationalization• Align your network and service capability roadmaps• Create a prioritized transition & launch plan to balance revenues with costs


A ‘Best Practices’ ApproachOperations Transformation

IP Transformation changes everything• Network Interface Points: e.g. collocation from CO to street cabinets• Services: e.g. regulated vs. non-regulated• Products & vendors: network, IT, CPE … content• Customer Interfaces: “Zero-Touch” provisioning and Customer Self-Service• In-house skills: spanning the present and the new technology and operations

Migration will not happen overnight• Physical Migration, Network Database Migration, Network Routing Migration,

OSS/BSS Migration, …• Migration strategy & planning, tools development and customer communication

Network transformation should go hand-in-hand with IT• Transform operations from managing networks to managing services and customers• New business and usage models require flexible rating, charging and billing• Challenges the processes, not just the technology !

Each transformation project is unique• Transformation may start anywhere in the service provider’s organization• Geography, local market, regulation, legacy infrastructure, resource availability,

budgets, etc.may affect transformation strategy, scope, roadmap and implementation


ConclusionsA ‘Holistic’ and ‘Best Practices’ Approach to IMS Rollout

• IP transformation is a ‘once in a lifetime’ business opportunity for service providers

• IMS is a key standards framework and reference architecture for new service development, deployment and delivery

• IMS rollout needs to be part of a ‘holistic’ network +services + operations transformation vision

• A ‘best practices’ approach and working with an experienced partner are the most effective paths towards predictable execution

• Carriers worldwide are leveraging Alcatel-Lucent’s global reach, experienced technical staff, and IP subject matter expertise to accelerate their network evolution and to incorporate the lessons learned from the early adopters

Transform predictably. Transform comprehensively. Transform profitably.


[email protected]

www.alcatel-lucent.comwww.alcatel-lucent.comwww.alcatel-lucent-iptc.com

Thank You!