PUSH-TO-TALK: New Voice Magic

Nextel commenced services more than a decade ago and since then it has been
almost synonymous with push-to-talk. Will that change now? It seems so. While
Nextel is unlikely to lose its pioneer status and its market leadership for a
long time to come, push-to-talk is likely to become increasingly mainstream as
the leading wireless operators and handset vendors across the world up their
stake in it. US operators Verizon Wireless and Sprint PCS launched their
push-to-talk services in quick succession in 2003 with much enthusiasm, bringing
an end to Nextel’s decade-old monopoly in the US. Similarly, Orange’s
announcement to commercially launch the first push-to-talk service over a GSM
network in the UK and France, in Q2 of 2004, and across eight other markets by
the end of the year has created excitement in Europe. Analysts expect other
leading European operators like Vodafone and T-Mobile, to join the bandwagon
soon.

Today, almost all leading mobile operators from the US, Europe, West Asia,
South East Asia, Australia, and New Zealand are looking at it as a new way to
improve their bottom lines. And, phone vendor such as Nokia, Samsung, Siemens,
and Sony Ericsson are joining what has been Motorola’s lonely walk for years.
Market leader Nokia has made it clear that by 2005 all its phones would have the
push-to-talk feature. Motorola too intends to make push-to-talk a standard
feature in all its phones. Similarly, Nokia and Samsung have announced a
cooperation agreement aimed at bringing push-to-talk over cellular (PoC)
technology to the mass market. Based on the cooperation, Samsung plans to
introduce push-to-talk in several of its mobile terminal products during 2004
and 2005, utilizing Nokia’s PoC technology.

This apart, three other trends are clearly emerging in the push-to-talk
business. First, while Nextel has mainly focused on business users, new
operators are taking a more mass-market approach. They believe that the ability
to connect instantly would make push-to-talk popular. In fact, Nextel too has
started to look at its Direct Connect brand of push-to-talk offering as a
service for everyone–one reason why it is now extending Direct Connect to the
whole of continental United States. Extension of the service to mass market
could mean that people would start using it more for person-to-person
communication than just for business communication.

Second, phone and technology vendors have begun to collaborate on
standardization of push-to-talk technology and making solutions offered by
different vendors interoperable. Cellular vendors have formed an industry
consortium consisting of Ericsson, Motorola, Nokia, and Siemens for
standardization of PoC networks. Existing push-to-talk services rely on
proprietary network architectures that enable a single carrier to provide the
service on handsets from a particular manufacturer only (Nextel is a classic
case). Third, operators launching push-to-talk are bringing-in new features and
capabilities as well as expanding the reach and coverage of the services. For
example, Orange’s Talk Now offers users the option to specify their
availability and to put their handset into silent mode. Similarly, Nextel is
making its service available across the US in order to broaden its appeal and to
take on the new competition. Until recently, it was available within local
service area only.

Why this sudden interest in a service that, till recently, was confined to
one operator? There can be many reasons for this. However, the most obvious
inspiration seems to be the success of Nextel as a push-to-talk service
provider. The technologies and opportunities available for push-to-talk are much
more advanced now than were available to Nextel. Nextel relied on proprietary
technology, which is no match for the much-advanced 3G services that many
operators are betting on now. Nextel’s push-to-talk grew on a user base
comprising construction companies, technical support teams, taxi services and
the like. The demand now comes from the mass market as well. Despite these
limitations Nextel, with a subscriber base of about 13 million, has the highest
average revenue per user (ARPU) in the industry at $71.

This inspiration apart, there is also the lure of new revenue streams from
voice, by positioning push-to-talk for a specific set of users and pricing it
lower than cellular voice. Orange sees it as a key for accelerating growth
across the group and believes that voice would get even stronger with its
TalkNow push-to-talk offering. Similarly, Fastlink of Jordan sees push-to-talk
as a service that would help it retain the market leadership. Interestingly,
Orange also sees push-to-talk as a substitute for SMS, for people struggling
with text messaging. But mostly, push-to-talk is an attempt to boost ARPU–after
all, the entire mobile user base would be a target once all mobile handsets
include the push-to-talk feature.

However, even as operators get busy with their push-to-talk plans, potential
users are sending mixed signals to whether they want such a service or not. A
recent study by market research company Zelos Group found that 45 percent of
customers who subscribe to wireless phone companies other than Nextel, wanted
the push-to-talk feature in their next cell phone. Push-to-talk ranked second
only to embedded digital cameras in a list of 10 most preferred features. The
much talked about Bluetooth wireless featured at the bottom. Similarly, a 2003
Yankee European Connected Consumer Survey also found 45 percent of the
respondents were interested in push-to-talk.

On the contrary, a survey from industry watcher Telephia, published in June
2003, found that a relatively low number (25 percent) of corporate executives
expected to use push-to-talk. The high initial cost for handsets capable of the
feature plus less-than-adequate security to guard calls from interception are
the major reasons for US businesses’ reluctance, according to the survey.

While it is still a long way ahead before any of the new operators emulate
the success of Nextel, one thing is clear–the magic of voice still lives on
and growing interest in push-to-talk is an effort to capitalize on that magic.

So, those who predicted that data would soon overwhelm telecom networks and
voice would become an inconsequential application, would have to wait for some
more time to see their prophecy come true.

Ravi Shekhar Pandey

Push-to-talk FAQ

What is push-to-talk?

It is a direct realtime voice communications service. The principle of the
service is simple, just push to talk to the other party. Thanks to the always-on
connection, calls can be started to both individuals and talk groups, with the
push of a key. The half-duplex (one-way at a time) call connection is almost
instant. This simple, direct communication serves the diverse needs ranging from
controlled team management to spontaneous sharing of experiences.

What does the push-to-talk over cellular (PoC) solution mean?

Push-to-talk over cellular (PoC) introduces a direct one-to-one and
one-to-many voice communication service in the cellular network. It makes
available two-way-radio-like services on cellular phones, thus enhancing
cellular services and bringing new business opportunities in the domain of voice
communications.

Source: Nokia Website