The current recession has exposed the difference between the “utility' business model” — revenue based on recurring monthly contributions by millions of subscribers — and the “Web 2.0 business model” — indirect revenue based on advertising. With marketing and advertising dollars rapidly shrinking, Google 's stock went down by 30 percent as compared to AT&T and by 15 percent as compared with Verizon. The difference is even higher when we look at a whole year — about a 70 percent loss of Google's value when compared to AT&T.

First let's acknowledge that this will likely change in the next six to 12 months as the economy (we hope) will recover and Web 2.0 and Web 3.0 will demonstrate again their market power. Huge amounts of bandwidth will be delivered by fourth generation GSM (aka LTE) and services from Google and others will quickly fill the broadband pipes.

Second, AT&T and Verizon valuations show that investors and customers understand the value of the network in the Internet world — in other words, the long-term investments service providers are making in their infrastructures. Also, this is supported by the economic stimulus programs with broadband taking the front seat in the government's plans.

So where is IMS/NGN coming into this picture? With broadband becoming ubiquitous, service providers can no longer afford to have separate networks for fixed and mobile voice, DSL, fiber to the home (or to the kerb), mobile data (with overlays for GPRS, HSDPA, etc), IP video (e.g. FIOS) and so on. A good example is the fixed voice network. While still a good revenue generator, it competes with free services from Skype, low cost services from Vonage and alike and cable telephony, not to mention cellular users. While much debate focused on the IMS business case, or more precisely the inability to charge an entire network cost to a single service or “killer app,” the debate should really focus on whether is really a good investment to continue with building parallel networks for what can be simply defined as Web 2.0 services (voice, video, internet access, mobility, presence).

Let's draw a parallel with the road system. Will it make sense to have five or six separate highways to keep truck traffic separated from buses, vans, cars and motorcycles? Of course not, and no one proposes this model for highways. So why would this model make sense for communications service providers? Not to mention that investors that continue their support for service provider are going to benefit along with customers, from lowering the cost and increasing the revenues with converged services delivered by “all-IP” IMS/NGN technologies.

Manuel Vexler is chair of the technical working group in the IMS Forum. He is well known for his expertise in voice and multimedia over Internet, bringing more than 20 years of experience to roles such as the CTO of CopperCom and vice president of IMS Interoperability at the IMS Forum. He drove M&A at Cisco, and launched new technologies at CopperCom, AMD, Alcatel (Newbridge) and Nortel.