The Key to Success

Push to talk has made waves in international markets, particularly the US, and several operators in the Middle East and Africa are looking to launch the service this year. But where will demand for the walkie-talkie application come from?

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By  Richard Agnew Published  March 28, 2004

|~|ptt1.gif|~|Operators hope PoC won't cannibalise revenues from existing services|~|It is widely accepted in mobile telecoms that revenues from voice are destined to decline as the service becomes increasingly commoditised. But by using their packet data infrastructure, network operators have started to deliver simple telephony in new ways. Push to talk over cellular (PoC) is one example of a voice application vendors have come up with. The service, which has proved popular internationally and is expected to make its debut in the Middle East and Africa (MEA) region in the next few weeks, allows mobile users to communicate in walkie-talkie style. Through PoC, the user can initiate a conversation by pressing a dedicated key on his or her handset, choosing one or many recipients from the buddy list on the phone. Half-duplex sessions manage the connection so that only one party can be heard at any one time. The idea is that, instead of having to SMS or call each recipient individually, a press of a button is all it takes to send a message directly to a group of friends or work colleagues. The service is expected to be particularly apt for situations where a user has to communicate with a single person or group, not only repeatedly but also at intervals. On an international level, PoC has already caught on in the US as cellular operators have sought to compete with Nextel, the operator using the proprietary iDEN technology developed by Motorola. Several launches in Europe and Asia have also taken place or are planned. In MEA, several operators are believed to be at the trial or pre-trial evaluation stage with PoC, and the service is expected to become available in various markets this year. Fastlink is preparing to soft-launch PoC this month in Jordan, using a solution from Motorola. Etisalat has scheduled the availability of the service in the UAE by October, while a similar move is expected by Qatar Telecom (Qtel). Saudi Telecoms Company (STC) also demonstrated the service at the Saudi Communications 2004 exhibition in February, alongside its network infrastructure provider, Ericsson. “A bunch of the operators in the Gulf are considering [PoC] very seriously. It’s a way to use the GPRS capacity that they have,” adds Mohsen Malaki, senior telecoms analyst, IDC CEMA. Although the source for the bulk of demand for PoC is yet to become clear, operators intend to use the service to earn incremental revenues from those generated by basic telephony, rather than cannibalising them. “They hope to make extra revenue from selling voice minutes that wouldn’t otherwise happen, using the lower price versus telephony, but also the broadcast and presence capabilities. Some also emphasis the messaging dimension, presenting ‘voice instant messaging’ as SMS for the textually challenged,” says Jeremy Green, principal analyst at Ovum. Additionally, PoC is being promoted by vendors as a low risk venture compared to other services such as MMS, because the solution relies on fewer points of connection in the mobile network. “PoC is more straightforward to implement, because there aren’t as many interfaces. With MMS, you are interfacing to e-mail servers, the SMSc, the WAP Gateway, and you’re using the GPRS network. If something goes wrong, it could be a number of things,” says Amr Al Said, Ericsson Saudi Arabia. Further down the line, PoC could also become a platform for value added services (VAS). Instant messaging (IM) software vendors, for example, are looking at embedding the technology in clients to enhance basic IM over GPRS. “Currently, the specifications for PoC don’t provide an interface for third party IM systems to connect to, so there will be proprietary push to talk over mobile IM to begin with,” says Sanjay Goyal, founder and CEO of India-based India-based mobile software provider, ACL. “But once [a] standard-based PoC system is in place in most networks, then there would be an interface for IM vendors. True peer-to-peer push to talk services will be driven more by the PoC standard, while PoC over IM will be used more for value added services like push to date,” he adds. To achieve high uptake, however, PoC will have to overcome various challenges. Handsets with an embedded PoC button are set to become available from various vendors in the region from Q204. As with picture messaging, the service will also rely on adoption of GPRS by operators and subscribers, although vendors have argued that PoC could also spur more activity from operators on GPRS roaming agreements.||**|||~|ptt2.gif|~|Goyal: PoC will be adopted to enhance mobile instant messaging services.|~|Another challenge for PoC to overcome before it is broadly accepted is its standardisation — an issue over which vendors publicly split last month. In August 2003, Ericsson, Motorola and Siemens announced that they were conducting joint interoperability testing for PoC technology, scheduled to be complete by Q2 this year. The specification is being created through the Open Mobile Alliance (OMA), designed to run on the group’s IP Multimedia Subsystem (IMS). In March, however, Nokia was criticised by rivals, who said it had refused invitiations to take part in interoperability testing and was seeking to rush to market with a pre-standard solution that might not necessarily be interoperable. In turn, Nokia issued a statement saying that its PoC system, due to become available in Q2, would also support the protocol suggested by the other vendors. The standardisation issue has also had a side effect in Jordan, where the Telecoms Regulatory Commission (TRC) has ruled that Fastlink must prove PoC interoperability and quality of service before it can press on with a full launch. “We have an issue but the regulator agreed that we could launch the service on a trial basis until we resolve it,” says Mohammed Saqer, Fastlink’s CEO. It has also been suggested, meanwhile, that the PoC market in Jordan could overlap with the business space being targeted by NewGen, the iDEN operator set to launch its network in the Kingdom at the end of this month. “It could cloud the issue if [the GSM operators] have PoC and mislead the consumers into thinking it is the exact same service,” says Ashraf Samawi, chief sales and marketing officer, NewGen. “But PoC is an add-on feature and has latency issues. You have to be a GPRS subscriber and have a handset with the push to talk (PTT) application, but all our subscribers will be PTT-enabled. The [GSM operators] need a few years before PoC will become a business proposition,” he adds. Conversely, while NewGen says it will concentrate initially on business demand for group communications in key vertical sectors, it may eventually target the mobile operators’ main base of subscribers. “Once we build a critical mass, it [our service] will become an option for the mass market, because there will be people on the network for [users] to talk to. From day one, there will be no relative benefit, but our customers’ employees are also individuals and it will become more of an attractive proposition for their friends and families,” says Samawi. It is also not yet clear exactly which segments PoC services will be targeted at. US PTT providers have largely concentrated on the business arena, but vendors have suggested that it be positioned more for the youth market in other regions. “As with most proposed wireless data services, there is considerable uncertainty among the vendor and operator community as to where the demand is going to come from,” says Green. Observers add that operators will also need to decide upon the best approach to pricing and marketing PoC, to avoid eating into existing revenues for voice. But with future average revenues per user [ARPU] for many operators resting on services beyond telephony, the launch of PoC may be deemed a risk worth taking. “Unlike many proposed data services, push to talk makes clever, creative use of the bandwidth available from wireless bearers and is well suited to the device and its user interface,” says Green. “It allows users to create for themselves the kind of sticky, community-oriented services that are important for creating and maintaining customer loyalty. [And] it isn’t trying to pretend that the phone in your pocket has the characteristics of a PC,” he adds.||**||

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