Subject: [NEXTEL-1] Are “push-to-talk” calls the next big thing in wireless?

From: [email-masked]
Date: Thu, 10 Jul 2003 22:45:20 -0400

Mobile telecoms

Doing the walkie-talkie
Jul 10th 2003 | SAN FRANCISCO
From The Economist print edition

Are “push-to-talk” calls the next big thing in wireless?

FEW people have anything good to say about America's fragmented mobile-telecoms
industry. Coverage is, by
European standards, atrocious, despite boasts from operators about the quality and
reach of their networks.
Customers have to contend with complicated roaming arrangements, baffling billing
terms, and bulky handsets.
Text-messaging is still a rarity. But in one area, America leads the world.

In 1996 the country's fifth-largest carrier, Nextel, launched an obscure network
technology, called iDEN, made by
Motorola. It has a unique feature: a “walkie-talkie” mode that allows Nextel
subscribers to talk to each other
instantly merely by holding down a special button and speaking into the phone.

For years, this “push-to-talk” (PTT) feature, used mostly by builders, maintenance
technicians and safety workers,
was seen as an anomaly. Nextel was derided for going down a technological dead end
with its choice of network
technology, which is outside the two main global standards, GSM and CDMA. But now
the tables have turned. As it
searches for new services to attract customers and boost revenues, the
mobile-telecoms industry has decided
that PTT is the next big thing.

Subscribers like PTT because they can get through to somebody straight away.
Operators like it because they can
charge a premium for it. Other American mobile-phone companies envy Nextel's
average revenue per user, an
important industry metric, of $67 per month, way above the average of $54.
Subscribers are also less likely to
defect to other operators once they have become dependent on PTT. Nextel's churn
rate is 1.9%, compared with
a national average of 2.4%. No wonder rival American operators are now racing to
add PTT to their existing
networks.

First to launch a rival service is expected to be Verizon Wireless, America's
leading wireless operator. Its PTT
service is now being tested, and could go live this month. AT&T Wireless is
expected to start testing soon, with
other American operators to follow. Rising to the challenge, Nextel is upgrading
its service to provide nationwide
(rather than just regional) PTT calling, backed by an aggressive advertising
campaign. It has also trademarked the
terms “push-to-talk” and “PTT” and says it will go to court to stop other
operators using them. Verizon,
meanwhile, has launched a lawsuit against Nextel, accusing it of unlawfully
obtaining a prototype Verizon PTT
handset and engaging in “corporate espionage” by making test calls.

In the short run, at least, Nextel has little to worry about. Adding PTT to an
existing GSM or CDMA network is
fiddly. Most subscribers will require new handsets, and operators must ensure they
have sufficient data capacity
on their networks since PTT calls are handled as packets of data, not as
traditional voice calls. And compared with
Nextel's service, which connects users almost instantly, it can take two seconds
to establish a PTT connection
over a GSM network, and four to six seconds over CDMA, says Bob Plaschke of Sonim,
a firm selling PTT upgrades
to operators.

But although operators' original motive for adopting PTT was just a desire to
imitate Nextel, says Phil Marshall of
Yankee Group, a consultancy, it is now seen as a service that will appeal to
teenagers and expand the market.
“Nextel's solution is wonderful for plumbers who say ‘Harry, bring me the pipe' a
hundred times a day, but that's
10% of the market,” says Mr Plaschke. He claims his firm's PTT system, which works
on GSM and CDMA, has
several advantages over Nextel's, including the ability to see if somebody is
available before trying to talk to them.
To appeal to teenagers, PTT will probably be marketed as “voice
instant-messaging”, or “voice texting”, says Jason
Chapman, an analyst at Gartner, a research firm.

Will PTT end up being used in America in the way that text-messaging is elsewhere,
further widening the gulf
between America and the rest of the world in wireless use? PTT advocates insist
that it will take off in text-loving
Europe and Asia as well, because there are times (such as while driving or
walking) when texting is impractical.
Several European operators are already looking at PTT. Nokia, the world's leading
handset maker, says interest in
the technology is widespread. Then again, it could all just be more hype from the
mobile industry, which is always
looking for something new to revive its fortunes. It may be able to talk the talk,
but can PTT walk the walk?

FEW people have anything good to say about America's fragmented mobile-telecoms
industry. Coverage is, by
European standards, atrocious, despite boasts from operators about the quality and
reach of their networks.
Customers have to contend with complicated roaming arrangements, baffling billing
terms, and bulky handsets.
Text-messaging is still a rarity. But in one area, America leads the world.

In 1996 the country's fifth-largest carrier, Nextel, launched an obscure network
technology, called iDEN, made by
Motorola. It has a unique feature: a “walkie-talkie” mode that allows Nextel
subscribers to talk to each other
instantly merely by holding down a special button and speaking into the phone.

For years, this “push-to-talk” (PTT) feature, used mostly by builders, maintenance
technicians and safety workers,
was seen as an anomaly. Nextel was derided for going down a technological dead end
with its choice of network
technology, which is outside the two main global standards, GSM and CDMA. But now
the tables have turned. As it
searches for new services to attract customers and boost revenues, the
mobile-telecoms industry has decided
that PTT is the next big thing.

Subscribers like PTT because they can get through to somebody straight away.
Operators like it because they can
charge a premium for it. Other American mobile-phone companies envy Nextel's
average revenue per user, an
important industry metric, of $67 per month, way above the average of $54.
Subscribers are also less likely to
defect to other operators once they have become dependent on PTT. Nextel's churn
rate is 1.9%, compared with
a national average of 2.4%. No wonder rival American operators are now racing to
add PTT to their existing
networks.

First to launch a rival service is expected to be Verizon Wireless, America's
leading wireless operator. Its PTT
service is now being tested, and could go live this month. AT&T Wireless is
expected to start testing soon, with
other American operators to follow. Rising to the challenge, Nextel is upgrading
its service to provide nationwide
(rather than just regional) PTT calling, backed by an aggressive advertising
campaign. It has also trademarked the
terms “push-to-talk” and “PTT” and says it will go to court to stop other
operators using them. Verizon,
meanwhile, has launched a lawsuit against Nextel, accusing it of unlawfully
obtaining a prototype Verizon PTT
handset and engaging in “corporate espionage” by making test calls.

In the short run, at least, Nextel has little to worry about. Adding PTT to an
existing GSM or CDMA network is
fiddly. Most subscribers will require new handsets, and operators must ensure they
have sufficient data capacity
on their networks since PTT calls are handled as packets of data, not as
traditional voice calls. And compared with
Nextel's service, which connects users almost instantly, it can take two seconds
to establish a PTT connection
over a GSM network, and four to six seconds over CDMA, says Bob Plaschke of Sonim,
a firm selling PTT upgrades
to operators.

But although operators' original motive for adopting PTT was just a desire to
imitate Nextel, says Phil Marshall of
Yankee Group, a consultancy, it is now seen as a service that will appeal to
teenagers and expand the market.
“Nextel's solution is wonderful for plumbers who say ‘Harry, bring me the pipe' a
hundred times a day, but that's
10% of the market,” says Mr Plaschke. He claims his firm's PTT system, which works
on GSM and CDMA, has
several advantages over Nextel's, including the ability to see if somebody is
available before trying to talk to them.
To appeal to teenagers, PTT will probably be marketed as “voice
instant-messaging”, or “voice texting”, says Jason
Chapman, an analyst at Gartner, a research firm.

Will PTT end up being used in America in the way that text-messaging is elsewhere,
further widening the gulf
between America and the rest of the world in wireless use? PTT advocates insist
that it will take off in text-loving
Europe and Asia as well, because there are times (such as while driving or
walking) when texting is impractical.
Several European operators are already looking at PTT. Nokia, the world's leading
handset maker, says interest in
the technology is widespread. Then again, it could all just be more hype from the
mobile industry, which is always
looking for something new to revive its fortunes. It may be able to talk the talk,
but can PTT walk the walk?

http://www.economist.com/business/PrinterFriendly.cfm?Story_ID=1914979

------------------------ Yahoo! Groups Sponsor ---------------------~-->
Buy Natural Vitamins for Good Prostate & Male Health. $28.97
http://www.challengerone.com/t/l.asp?cid=2865&lp=prosta2.html
http://us.click.yahoo.com/qJIe0D/89VGAA/ySSFAA/61FxlB/TM
---------------------------------------------------------------------~->

Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/