Tuesday, May 09, 2006

MS-Based Apps May Not Generate Expected Windfall for Service Providers

In-Stat: IP Multimedia Sub-System (IMS)-based communication applications, enhanced by presence and other personalized functionality, will add value to existing services, but may not generate a windfall of new consumer spending. The main revenue benefits that IMS provides lie in the integration of wireless and wireline services, and the creation of integrated multimedia service bundles for premium content and entertainment services. Historically, consumer spending for communication services tracks consistently with growth of overall consumer spending. Depending on new consumer spending for revenue growth is a risky proposition. The objective of carrier IMS revenue strategies should be to capture the maximum percentage of household monthly spending on communication and related services.

  • Legacy Public Switched Telephone Network (PSTN) revenue streams must be retained for as long as possible. Despite a declining revenue trend, pricing and gross margins should not be lowered simply to retain non-broadband single-service customers.

  • Broadband market share will dictate future subscriber ARPU and carrier revenue potential.

  • Rising content costs and communication service rate increases will limit new consumer spending for IMS-enabled communication applications.

Consumer IMS Revenue Strategies Publ 20060509