Subject: [NEXTEL-1] Walkie-talkie calls becoming all the rage

From: Marcelrf <[email-masked]>
Date: Tue, 06 Apr 2004 12:35:07 -0400

Walkie-talkie calls becoming all the rage

BY VIRGIL LARSON

WORLD-HERALD STAFF WRITER  
Alltel Communications added walkie-talkie service to its Nebraska 
wireless phone network last month, making it the third wireless 
carrier in the Omaha market to do so in the past several months. 

Alltel joined Sprint and Verizon in following Nextel, the longtime 
leader in walkie-talkie wireless-phone service, into the market. Two 
more carriers, AT&T Wireless and Qwest Wireless, expect to add the 
option to their wireless service in Omaha this year. 

Why all the interest in adding a two-way radio service to a wireless 
phone? 

"Everyone is suffering from Nextel envy," said Roger Entner, an 
analyst with the Boston research firm Yankee Group, referring to the 
success Nextel has had. "For the other carriers it allows them to 
offer customers a different experience than they usually have, and 
raid a little in Nextel territory." 

Nationwide, Nextel and its affiliate Nextel Partners have 14.5 
million walkie-talkie customers. All other carriers together have 
about 500,000, according to Yankee Group. The 15 million represents 
less than 10 percent of the 156.74 million U.S. wireless phone 
subscribers. 

Entner expects use to grow. "We think that in the end about a third 
of the people (wireless customers) will be subscribing, probably over 
the next five to seven years," he said. 

Larry White, a spokesman at Alltel headquarters in Little Rock, Ark., 
said providing the service is a way of retaining customers who asked 
for it. 

"You want to keep your churn rate as low as possible because of the 
cost to win customers," White said. "So if you have a major customer 
who says, 'We wish you had walkie-talkie service, you listen to 
him.'" 

In addition, he said, "it's an opportunity to win new customers in a 
maturing industry." 

With the rollout in Nebraska, Alltel now sells walkie-talkie service 
in all 26 states where it offers traditional wired-line service. It 
is the primary wired-line carrier in Lincoln and much of southeast 
Nebraska. 

U.S. Cellular, which launched wireless phone service in Omaha last 
year, does not yet have walkie-talkie service. The company is 
planning one, said Rene Parson, the company's manager in Omaha, but 
doesn't want to launch it until it can be assured it will deliver 
good service. 

The cost of walkie-talkie calling
----------------------------------------------------------------------
Alltel Touch2Talk: $5 on top of wireless phone rate gets 100 minutes 
of two-party walkie-talkie calls and 50 minutes of group calls per 
month; $10 for 500 two-party minutes and 100 group minutes; $20 for 
unlimited two-party minutes and 100 group minutes. 15 cents for each 
additional minute. 

Nextel Direct Connect: Included in wireless phone rate. 

Sprint Ready Link: $15 a month on top of wireless phone rate for 
unlimited minutes of two-party or group walkie-talkie service. 

Verizon Push to Talk: $20 a month add-on to America's Choice phone 
rate gets unlimited minutes of two-party and group walkie-talkie. 
(Current promotional rate.)

"Everybody wants to jump on the bandwagon," John Rooney, chief 
executive of Chicago-based U.S. Cellular, said in explaining other 
companies' efforts to grab a piece of the market Nextel 
dominates. "The problem is the stuff being pushed as an alternative 
doesn't work very well." 

The time lapses in the conversation when a user has to push a button 
to talk and release it to hear is unacceptable, Rooney said. "We've 
looked at it, and we don't think it's very consumer-friendly," he 
said. 

Phone executives list the construction industry as one of the 
heaviest users of walkie-talkies, partly because the service allows 
one person to talk to a group of workers at one time, what Rooney 
called "mass broadcast ability." Its geographic reach is limited only 
by the carrier's network; many systems work nationwide. 

Typical of how it works is the Verizon system. Pushing a button on 
the phone brings up a menu on the phone screen that lists the 
individuals and groups in the user's group, said Karen Smith, Verizon 
spokeswoman in Minneapolis. The caller clicks on a person or group on 
the menu and starts talking, pushing the button to talk and releasing 
it to listen, Smith said. 

While a conversation can be carried on one-to-one, it also can be 
broadcast on the handset as if on a speaker phone. In that case, 
Smith said, "it's not necessarily a private conversation." 

Buying walkie-talkie service means buying a new phone; the service 
can't work on a regular cell phone. 

Sprint's Ready Link has found some appeal outside the traditional 
business uses, said Dave DeVries, a Sprint spokesman in Chicago. "We 
saw a use among the college crowd," DeVries said, as well as with 
families. But no particular demographic makeup of buyers has been 
seen in the short time the service has been out, he said. 

Most Nextel customers are businesses, but the company is moving into 
the consumer market, said Andrew Burns, the company's general manager 
for Nebraska, South Dakota and southwest Iowa. Nextel has been in the 
walkie-talkie business 11 years and has offered the service in Omaha 
four years. Along with construction companies, major users are public 
safety departments and truckers. 

A key strength of Direct Connect, the name Nextel gave its walkie-
talkie service, is the virtually instantaneous connect time once the 
caller pushes the talk button, Burns said. The delay is less than 750 
milliseconds, he said, whether the call is across town or across the 
country, including to Hawaii. 

The company plans a major expansion of its Nebraska coverage area 
this year and into 2005, extending service beyond its current 
footprint, which is Omaha and surrounding towns, including Council 
Bluffs, and Lincoln, Grand Island and Hastings. 

Most of the company's wireless phone-rate plans include walkie-
talkie, he said, and, unlike other wireless firms, Nextel sells stand-
alone walkie-talkie service. "We offer walkie-talkie service without 
cellular," Burns said. "We don't offer cellular plans without walkie-
talkie." 

Nextel's technology has a built-in benefit for the company's 
operating budget: Walkie-talkie calls take up a smaller part of the 
broadcast bandwidth than a regular cell phone call. 

Yankee Group's Entner said using less bandwidth means a wireless 
carrier can carry a walkie-talkie call at lower cost than a regular 
call and still charge for the additional service. 

"Cut your costs, and the consumer actually will pay for it," he said. 

http://www.omaha.com/index.php?u_np=0&u_pg=46&u_sid=1057628

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