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Push to talk: a status check |
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| Thursday, 30 September 2004 | |
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Can something so mundane be so profitable? You bet it can… and the cellular industry is betting it will be, too…
Push to talk (PTT) is the latest new frontier for the mobile industry. Bedazzled by the revenues being generated by Nextel in the US, cellular operators around the world are rushing to offer PTT capability to their customers. Push to talk is hardly a new concept, it is the sine qua non of the private mobile radio (PMR) business which has been flourishing since the late 1940s. Until very recently PMR, was largely confined to two market areas; the construction, transportation and distribution industries and what is known as the ‘blue light’ sector (the emergency and security services). Now cellular operators, anxiously searching for a new ARPU stimulator, have latched on to PTT in the hope of emulating the success of US PMR operator Nextel. With ARPUs of around US$70 a month, Nextel is the envy of its cellular brethren who hope that introducing PTT will prove an equally profitable activity for them. A number of operators around the world have already launched PTT services and many more are expected to follow suit over the next few months. At the time of writing there were PTT services in the US, the UK, Australia, Thailand and Georgia but this list is continually changing (click here for the latest round-up). Historically, handset shortages have been the bane of new technology launches but in this instance PTT seems to have achieved a first. There are already PTT-enabled handsets on the market from leading vendors such as Motorola, Nokia, Siemens and Sony Ericsson and Far Eastern manufacturers are unlikely to be far behind. So what is PTT? Push to talk is a method of conversing using half-duplex or simplex communications lines. Users press a button to make a call and release it to hear the response. Unlike the normal full duplex cellular communications mode, only one person at a time can speak. The way PTT works is that the user selects the person (or persons) with whom he wishes to speak from a list stored in the mobile phone. Once selected, he pushes a single button and all the defined addressees receive an invitation to participate in a call session, an invitation which they can either accept or decline. Once all the called parties have signified their intention to participate, the initiator presses a button and starts the conversation. Everyone in the session hears all the conversations simultaneously and any one in the group can respond by pressing his or her own PTT button. This type of communications is well established in the PMR community where it provides a useful service along the lines of ‘is there anyone working on the fifth floor with any spare nails?’ or ‘can anyone pick up Mr Jones from Acacia Avenue?’ The current enthusiasm for PTT is not the first attempt by the cellular community to break into the traditional PMR market. In the late 1990s, Ericsson introduced a concept called ‘GSM Pro’, which was designed to deliver PMR-type communications over GSM networks. The problem then, as now, is latency. Call set-up times on PMR networks are typically around one second – an essential requirement for the police, fire and ambulance services. However, technology restraints mean that call set-up times over cellular networks are significantly longer: up to 15 seconds delay has been reported over the US operator Verizon’s PTT service. Although this would make PTT-over-cellular unacceptable to the emergency services, this is not the target market for today’s PTT services which are aimed at social interaction between groups. Many operators are looking at PTT as being an enhancement to the already booming SMS business, hence the youth market is the main target. Lothar Pauly, Member of the Board of Siemens’ mobile communications division, defines this strand of the PTT market thus: “push and talk is a new service for the mass market. This service is not only interesting for contractors and field staff but is also an attractive offer for young people, clubs and associations – ie for anyone who wants to maintain contact with lots of people, either privately or professionally.” Favourable technology A major driver for the move to PTT, which in the mobile world is more popularly known as ‘PoC’ (Push to talk over Cellular), has been the widespread deployment of technologies such as GPRS and CDMA 1X. Although PoC is possible over circuit switched networks there are clear advantages in utilising the technology over packet networks. According to Swedish consultancy Northstream , PoC over GPRS is at least five times more efficient in terms of radio resource consumption than PoC over circuit switched networks. With EGPRS the differences are even more marked with the efficiency gain being up to 14 times. Translated into costs for a sample case, a circuit switched solution will be six times more expensive than PoC over GPRS. Both approaches offer acceptable speech quality, says Northstream, but PoC over GPRS provides a faster session set-up. The technical benefits will become even more marked with the introduction of the IP Multimedia Subsystem (IMS) which will enable IP-based connections between mobile phones and which is based on 3GPP specifications. The standardisation issue PoC is a push-to-talk solution for packet switched networks based on specifications drawn up by the Open Mobile Alliance (OMA). There is a general industry acceptance that the open standards OMA approach is the preferred way forward but, according to Northstream, operators are not necessarily ruling out the adoption of pre-standardisation proprietary solutions at this point in time. As Northstream points out, there are significant benefits in going down the OMA specification route including: • interoperability between terminals and networks; • interoperability between operators; • native PoC client support in terminals; • synergies in terminals and networks with other IMS-based services; and • the possibility of using performance boosters such as SIGCOMP for SIP signalling and header compression mechanisms for RTP frames carrying speech samples. In this uncertain situation a number of leading vendors have taken the initiative and produced a jointly developed PoC specification based on the IMS. Ericsson, Motorola, Nokia and Siemens announced the completion of the specification in early September 2004. According to its progenitors, the specification ‘leverages existing 3GPP, OMA and IETE specifications making the service easy to integrate in operators’ existing access and packet core network infrastructures.’ The specification has six main elements: Requirements; Architecture; Signalling Flows; Group/List Management; and two User-plane specifications (transport and GPRS). The four companies have submitted the specification to the OMA as a possible baseline for providing a access-independent and globally interoperable PoC standard. The group has won support for its proposals from other operators and vendors including AT&T Wireless, Cingular, Sonim Technologies and Sony Ericsson. The OMA standard is expected to be finalised by the end of 2004 with interoperability tests planned into 2005. Standard Insider, a new company focusing on standards and the mobile data services industry, has just released a report on PoC. Standard Insider’s CEO Dr Ofer Weintraub, commenting on the report, says that some of the best known issues, like service latencies and delays, have attracted considerable technical innovation and are well addressed within the emerging standard. Meanwhile, other non-standard directions are also evolving, having their own advantages and challenges. “At the end of the day”, comments Dr Weintraub, “it is all about interoperability, and although this can be provided in more than one way, standards offer great ubiquity and cost savings to both operators and consumers.” Will it fly? Despite the industry-wide enthusiasm for PoC, there are questions as to whether mobile operators can emulate the success of Nextel. The US operator’s high ARPU has been achieved by targeting corporate customers whereas the mobile operators will have to try and push PoC into the mass market. This sector is much larger but historically has generated lower ARPU. In addition, in the traditional PMR markets addressed by Nextel, business and corporate customers sign up en bloc, so a construction company, for instance, may in one hit sign up 200 users. Capturing PoC customers on a one-by-one basis may be a challenge for the mobile operators who will also have to build their PoC customer base from the ground up. A key factor in the favour of the mobile operators, if they can make it fly, is cross-operator calling. As SMS proved, until users can send and receive messages from friends and colleagues on other rival mobile networks, market development stalls. Nextel utilises a proprietary Motorola technology called ‘iDEN’ so its customers can only communicate with one another – although as Nextel’s geographic footprint spreads to Latin America the opportunity exists for trans-national calling. In the end it comes down to whether the industry belief that there exists a huge potential market for PoC is valid. The technology is getting out there fast and for once there will be a variety of handsets available in the market. Pricing will be a key issue; the Nextel pricing model of all you can eat for a fixed (and modest) monthly fee is not historically one which the mobile industry has embraced. Yet, as the recent Northstream white paper commented, “there are many attractive aspects of push-to-talk and if positioned and priced correctly it is likely to create traffic and revenue growth” At least one analyst, Mobileinfo, believes in PTT. It forecasts that revenues from PTT will rise from US$84mn in 2003 to US$10.1bn in 2008, with subscriber numbers growing over the same period from 2.3mn to 340mn. That is a PTT ‘pot’ worth chasing… Ian Channing Looking for more information on the latest PTT situation? Why not sign up for the IIR Push to Talk World Summit? To be held in Lisbon from 29 November to the 3 December 2004, the event will bring together all the key players in this new market. For further details click on the IIR logo on the TelecomRedux home page. |
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