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Tutorial – 3G, IMS, and the Carrier Network Evolution Economics

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What are 3G and IMS?

Third Generation (“3G”) wireless and Internet Multimedia Subsystem (“IMS”) are technologies which, in many ways, are very complementary.

In essence, 3G is a radio modulation technology that enables greater throughput of bits per Hertz, making it possible to offer subscriber applications and services that require higher bandwidth.  The two dominant 3G technologies in the marketplace today are WCDMA/UMTS and 1xEV-DO, which have evolved from different technologies and are the product of different standards bodies.

IMS, on the other hand, is a network technology based on policies that provide a common enablement layer for all applications and services.  IMS allows a network operator to rationalize much of the investment required for new services (and legacy services as well) across a shared, policy based enablement layer.

Standards

The Third Generation Partnership (3GPP) sets standards for both GSM/UMTS and IMS.  Third Generation Partnership 2 (3GPP2) defines CDMA2000 (1xRTT/1xEV-DO) and MMD, a CDMA variant of IMS.  Also involved is TISPAN, a standardization body of ETSI specializing in fixed networks and Internet convergence.  Ad-hoc and other working groups exist between both 3GPP and TISPAN sharing ideas and approaches toward the next generation technology, especially in the area of fixed and mobile convergence.

Historical Milestones

3G, IMS, and the Economics of Network Evolution

Both 3G and IMS seek to help operators evolve data-oriented service offerings for their subscribers.  Both technologies are aimed at higher speed data applications.  What’s also important to consider, however, is the enablement of voice traffic over Internet protocol (“VoIP”), traversing the network in a packet oriented fashion rather than the traditional, legacy circuit switched environment.  Because the majority of traffic and revenues today in mobile networks are based on voice, the cost differential of VoIP versus legacy, circuit switched networks, is a supportive element of a carrier’s strategic investment for both 3G and IMS.

Obviously, engineers and network planners would want to look to investment strategies today that can be reused and leveraged in a 3G/IMS environment tomorrow to gain better overall capital efficiency.  Moreover, while both 3G and IMS have their own basis of admission control and quality of service, IMS provides the possibility of increased granularity with respect to quality of service, down to subscriber profiles, applications preferences, etc., where 3G today defines only four, rather coarse classes of services around streaming, interactive, conversational and background traffic.  In the 3GPP community, LTE, or Long-Term Evolution is currently working towards end-to-end QoS.

Why Is the Study of the Economics of Network Evolution So Important?

The mobile industry in the developed countries have reached or nearly reached maximum penetration levels.  To continue to drive growth, new traffic must be generated, which can originate from new services from existing subscribers as well as from machine-to-machine interfaces.  Moreover, for the industry to show increased margin over time, the cost per Erlang (or Erlang equivalent) must decline.  This can be done, relative to existing, 2G technologies, with 3G and IMS, making the financial justification for the migration and highlighting policies and control methods which will provide usage guidance for sales and marketing programs that does not cannibalize existing revenue streams nor decrease the effective ROIC of capital budgets for new applications on a per-dollar basis.

Challenges Ahead

While, on the surface, IMS paired with 3G radio modulation seems like an easy decision, there is still much work to be done in standards.  A great deal of work also remains to be done in designing, deploying and operating live networks.  Policy based decision control is intended to be hierarchical, and network designers of tomorrow will not only require mastery of traffic management, but also of issues such as policy management, access control, quality of service, and migration to IPv6.

Additionally, with LTE, the radio access network begins to operate almost independently from the core, handling all mobility management between eNBs in a flat IP architecture.  Understanding this as an end point relative to today’s 2G and 3G radio access networks can be challenging, especially for carriers who wish to avoid costly redesigns and major network overhaul projects with the introduction of LTE.

Business Implications

Carriers who want to further differentiate their services offerings will migrate both the radio access and core networks towards 3G, ultimately LTE (or potentially EVDO Rev C, WiMAX, or others) with an IMS core network.  Furthermore, carriers with both a wireline and wireless network will be able to offer a higher degree of integration between home entertainment services, communications, and data bundles which will incorporate the home telephone, the mobile telephone, televisions, etc., in a manner that is highly integrated and interoperable, allowing for greater degrees of flexibility than today’s technology for subscribers.

Summary

Carriers in the developed countries face a number of challenges today that include margin expansion, adding shareholder value while coping with a shrinking addressable market, and ongoing complaints about the quality of subscriber experience.  By understanding the margin-per-application for the 3G applications such as video, audio, SMS, and others, and while understanding the cost differences on a per-minute-of-use basis for voice in a legacy domain versus that of a 3G/IMS system, carriers can begin to set forth strategies that will address all challenges while continuing to grow their business.

How to Learn About It

Courses

Books:
For books on 3G and IMS, check out the bibliographies at the end of our tutorials on 3G, 4G, and IMS.

Web Resources:

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