Technology | Media | Telecommunications

Tuesday, October 07, 2008

Can Mobile Push-to-Talk Rise Again in U.S.

According to In-Stat, the high-point of the U.S. push-to-talk mobile phone market was the late 1990s and early 2000s, when the distinctive chirp of Nextel handsets could be heard on construction sites, and in repair vehicles from coast to coast.

Nextel was the envy of the mobile industry, with its extraordinarily loyal customers and $71 monthly average revenue per user (ARPU), which was almost 50 percent higher than its competitors. The conventional (and incorrect) wisdom of the time was that push-to-talk (PTT) was the key to Nextel's success.

As a result, Cingular, Verizon Wireless, and Sprint launched poorly-received push-to-talk (PTT) services of their own in 2003. Technological limitations of their new CDMA 3G networks caused unacceptable delays during PTT calls, and Cingular's circuit-switched PTT service from Kodiak Networks worked relatively well but failed to capture the public's imagination.

Nextel appeared to be invulnerable until 2005, when a number of marketing and technological gaffes started a period of decline. Millions of Nextel customers fled, but, with no acceptable PTT solutions from competitors to fill their needs, they were forced to use cellphones and text messaging instead.

Today, it appears that push-to-talk is back, or at least it is available again. There are push-to-talk offerings from Sprint-Nextel, AT&T Mobility and Verizon Wireless. The technology and user experience are much better but the potential market isn't as clear.

Recent testing by In-Stat of several PTT handsets demonstrates that the networks and devices are ready. Most notable are the handsets from Sprint-Nextel that interoperate Nextel's legacy iDEN network.

Those CDMA devices seem to provide the same performance and experience as iDEN while offering a more white-collar look and feel and the Sprint's larger CDMA coverage footprint. AT&T Mobility and Verizon Wireless also offer both consumer and rugged PTT models.

Now that the technological playing field is leveled, the mobile operators will be free to compete for Nextel's former customers. However, it is not 2003 anymore -- Nextel no longer commands the critical mass of contractors and tradesmen it once did.

In addition, text messaging was in its infancy with the U.S. five years ago. Today, text is used by two thirds of mobile subscribers and may be seen as a substitute for PTT's quick voice chirps.

Regardless, the question remains, is the U.S. market ready to give PTT a second chance?