Subject: [NEXTEL-1] AT&T Wireless takes on Nextel in 'push-to-talk'

From: [email-masked]
Date: Mon, 30 Jun 2003 06:53:54 -0400

AT&T Wireless takes on Nextel in 'push-to-talk'

By Jeff Meisner

Puget Sound Business Journal (Seattle)
Jun. 30 — AT&T Wireless Services Inc. wants to
go head to head with Nextel Communications
Inc. in the "push-to-talk" arena.
"Push-to-talk" is industry parlance for a
service that allows subscribers on the same
wireless network to talk with the touch of a
button -- much like using a walkie-talkie.

The Redmond-based wireless operator expects to roll out a
push-to-talk service sometime in early 2004, said Rich Blase, a
spokesman for AT&T Wireless.
Industry experts say it will be a long, hard slog to take market
share away from Nextel, whose push-to-talk feature, called Direct
Connect, has helped the Reston, Va.-based carrier achieve the lowest
customer turnover rate in the industry.

AT&T Wireless will also encounter competition from at least two
other major wireless operators, Sprint PCS and Verizon Wireless,
that have plans to launch push-to-talk services of their own in late
2003 or early 2004.

Blase acknowledged the difficulties AT&T Wireless faces in the
segment.

"Will it be hard to go in there and try and sell somebody?" he
said. "I'm sure it won't be easy. You have to have a product that
works even better than the other guy."

Although AT&T Wireless CEO John Zeglis has vowed not to go
to market with an inferior product, analysts aren't impressed by the
early versions of the carrier's offering.

The carrier's service is based on technology developed by
Finnish mobile phone manufacturer Nokia Corp., Swedish wireless
equipment maker Ericsson and German electronics giant Siemens AG.
The technology makes it possible for callers on a GSM wireless
network to make push-to-talk calls to callers on the same network or
to callers on a CDMA2000-1x network.

GSM, or global systems for mobility, is a network standard for
wireless voice services used by most operators in Europe and Asia, as
well as by American carriers including AT&T Wireless, T-Mobile
USA Inc. and Cingular Wireless.

CDMA2000-1x is the network standard used by Sprint and
Verizon Wireless.

Ned Zachar, an analyst with New York City investment bank
Thomas Weisel Partners, doesn't think any of the carriers will come up
with a product comparable to Nextel's Direct Connect.

"Nokia demonstrated a push-to-talk product at a trade show in
March and it had latency of up to seven seconds," said Zachar.
Latency is a term that denotes the interval between a caller talking into
a phone and the person on the other end hearing what's been said.
Nextel's push-to-talk service has virtually no latency.

Nokia's GSM-based push-to-talk technology also has another
problem yet to be ironed out.

Charles Golvin, a wireless analyst with Cambridge, Mass.-based
Forrester Research Group Inc., said the procedure for setting up a
push-to-talk call on Nokia's technology is much more involved than it
is on Direct Connect.

"One of the big advantages for Direct Connect is the setup for
the calls is immediate," Golvin said. "The implementations using GSM
and CDMA2000-1x are more involved, so it doesn't have the same
feel as Nextel."

AT&T Wireless' Blase declined to comment on how much the
wireless operator is spending to solve these problems.
However, he did say AT&T Wireless' push-to-talk service could
ultimately eclipse Nextel's in terms of its global availability.
"Our push-to-talk service could eventually be international in
nature," Blase said, pointing to the carrier's numerous roaming
agreements and equity stakes in several European carriers, as well as
its strong relationship with Japanese wireless giant NTT DoCoMo,
which owns 16 percent of AT&T Wireless.

The carrier views push-to-talk as a service that complements the
features it already offers to business customers, such as real-time
e-mail, and Web and corporate intranet access.
"Push-to-talk will just be the icing on the cake," Blase said.

"When you go after somebody else's customers, those customers have
to look at the entire value chain. We've got a very fast next-generation
data network."

However, it's also important to have a strong presence in the
business market, a segment dominated by Nextel, said Forrester's
Golvin.

"Nextel has done a good job of integrating their wireless
applications into their business customers' networks," Golvin said.
Nextel has deals with companies like Ascendent
Telecommunications Inc. of Encino, Calif., which helps carriers plug
into corporate networks so telecom services can be delivered without
too many problems.

When it comes to pricing for push-to-talk services, AT&T
Wireless is still trying to work out a feasible pricing scheme, Blase
said.

Thomas Weisel's Zachar thinks pricing could be a potential
hurdle for all the carriers interested in push-to-talk.

"If the carriers are spending extra money on this, which they are,
then it probably won't be a freebie," he said. "If they don't figure out
how to bill it, that could make life tricky because at the end of the day,
that's what phone companies do for a living."

http://famulus.msnbc.com/famuluscom/bizjournal06-30-010415.asp?bizj=SEA#body

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