Push-to-Talk competition expected to heat up next year, carriers continue work

Telus Mobility’s iron grip on push-to-talk (PTT) services will loosen this year as at least Bell Mobility introduces the service over its CDMA network. Key rival Rogers Wireless Inc., however, remains mum on the company’s plans to introduce PTT services. "We’re watching the development closely, but it is premature to comment (on the company’s plans)," a Rogers Wireless spokesperson told Report on Wireless late last year. Bell Mobility, however, is more forthcoming with information on its PTT plans. The company says technical trials are underway with employees, and that PTT service deployment is on track for a 2005 introduction. A company spokesperson told RoW late last year that the company would be able to disclose further details about the initiative early this year. Observers have been waiting for Bell to pull the trigger on push-to-talk since it announced plans to do so in the fall of 2003. At the time, Bell Mobility president Michael Neuman said that the company would follow the lead of Sprint PCS, its strategic partner in the United States. Sprint and Verizon Wireless both introduced PTT service over their traditional cellular networks in the fall of 2003. Telus Mobility made public its own plans to offer PTT services over its PCS network following Bell Mobility’s announcement. Telus Mobility did not return calls seeking comment on the company’s plans. Industry consensus is that PTT will become a mainstream wireless service offering in the not-so-distant future. The pioneer of the iDEN technology, Motorola, which first allowed for one-button instant connectivity, shares this opinion. Mike Hortie, VP and GM of Motorola Canada Inc.’s personal communications sector, told RoW last March that it was only a matter of time before PTT services become available on a broader basis in Canada (RoW, March 10/04). Nokia is joining Motorola to develop PTT services over PCS networks by leading the charge on the GSM front with a number of other device and network companies such as Siemens, Ericsson and Samsung joining in. Nokia has inked 22 commercial contracts to date for the deployment of PTT over cellular across Europe and the Asia-Pacific region. There are also about 30 wireless carrier trials taking place in a variety of countries. Tejas Rao, director of product technology and sales at Nokia Canada, says the technology being promoted by Nokia is based on a pure data network rather than circuit-switched technology of iDEN and it’s the always-on feature of GPRS 2.5G networks that enables the PTT functionality. The goal now is to standardize the technology through the Open Mobile Alliance. Nokia’s push-to-talk over cellular offering is based on its IP Multimedia Subsystem platform, a half-duplex Voice over IP technology used over second generation GSM/GPRS networks. Rao explains that this platform enables not only push-to-talk but also allows the introduction of a whole range of advanced data services. Despite 2004 being a transition year for push-to-talk where the GSM players focused their attention on standardization, global penetration of PTT services appears ready to boom as Nokia has vowed to make all of its GPRS/W-CDMA handsets PTT capable by the end of 2005. Market research firm Visiongain anticipates that successful marketing and pricing strategies could result in more than 350 million PTT subscribers by 2009 generating about US$12 billion in annual revenue. Research from Wintergreen Research Group projects similar figures with revenue in the US$10.1-billion range by 2008 from 340 million subscribers. The benefits of PTT to carriers are obvious, says Rao, explaining that by capturing voice in data packets it increases wireless data usage, which in turn helps produce higher per user average revenue results. He adds that it will only be a matter of time before more carriers realize the benefits and begin to implement this type of service. Nextel Communications Inc. in the United States carries some of the highest average revenue per user (ARPU) figures in the world because of its PTT service. For the third quarter ended Sept. 30, 2004, the company had approximately 14.5 million subscribers generating ARPU of US$69 (these figures do not include Boost Mobile subscriber and ARPU results). The 2004 third-quarter figure is down slightly from the previous year’s Q3 average per user revenue of US$71. Not only is the monthly revenue per subscriber significantly higher for PTT services, the same holds true for lifetime revenue. Nextel reported an increase from US$4,100 in the first quarter of 2004 to approximately US$4,600 in the third quarter. Telus Mobility doesn’t report separate results for its Mike business, but it is widely speculated that they are in line with those of Nextel and are a major contributor to the company’s $62 per user average revenue. Verizon Wireless introduced its service in 2003 and within the first two months of offering PTT service it had garnered approximately 100,000 subscribers. The operator said at the time it was satisfied with the numbers. Current PTT subscribers from Verizon were unavailable at press time. Sprint PCS, which introduced its own flavour of push-to-talk services shortly after Verizon, reported last May that it had attracted about 275,000 subscribers to its Ready Link PTT service. For the third quarter ended Sept. 30, 2004, the company recorded per user average usage per month of just under 17 hours with an ARPU of US$63.

Push-to-Talk competition expected to heat up next year, carriers continue work

News | 01/10/2005 5:00 am EST

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