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Push-to-talk coming to a net near you

Apr 14, 20035 mins
AT&TNetwork Security

Nextel’s popular DirectConnect feature soon to be imitated by other wireless carriers.

The largest wireless carriers are just now scrambling to roll out their own push-to-talk capabilities after having watched Nextel make hay with the feature for a decade.

The move means more users will gain the ability to instantly communicate with others using their wireless handsets. For carriers it might mean more revenue and lower customer churn.

Nextel has been offering its DirectConnect feature for 10 years. The feature has recently grown in popularity as it has evolved from closed-user groups – within a company or department – to its current platform that lets DirectConnect users instantly chat with others within their geographic region.

The service completes and sets up calls almost instantaneously, says Blair Kutrow, vice president of product management at Nextel.

“Users push the button and have the floor to communicate. In a matter of milliseconds the person they are trying to contact receives that information and chooses to accept or ignore the call,” she says. Customer have a list of DirectConnect users programmed into their handset that they can connect to immediately by highlighting a name and pushing a button. Users also can initiate group DirectConnect calls by highlighting multiple names.

Later this year, Nextel plans to offer national support for DirectConnect. National DirectConnect would let users chat instantly with all DirectConnect customers throughout the U.S. Nextel is in the process of upgrading its network and plans to first offer national support in Boston and Los Angeles by the end of the third quarter, Kutrow says.

Competitors are readying their own push-to-talk services. Verizon Wireless and Sprint PCS say they will roll out push-to-talk in the second half of the year.

Cingular would not say when it might offer push-to-talk, but the carrier, with AT&T Wireless, is backing push-to-talk standards development. In February, Ericsson, Nokia and Siemens announced they are working on an open standard to support push-to-talk over GSM, General Packet Radio Service and Enhanced Data Rates for Global Evolution networks.

Nextel’s network is based on Motorola’s proprietary integrated digital enhanced network (iDEN) technology. Nextel is the only provider in the U.S. to support a national iDEN network.

The goal of the specification is to support push-to-talk communications over multiple networks, says Tapio Heikkila, director of business development at Nokia. Nokia has been working on the technology for a few years, but joined with Ericsson and Siemens to be sure it wasn’t creating pockets of users that couldn’t communicate with each other, Heikkila says. The group plans to test the technology with wireless service providers later this year.

AT&T Wireless says it will trial the technology in a few markets by year-end, but Nokia would not say which additional carriers will participate in its push-to-talk technology trial.

Why are other wireless service providers so keen to get into the push-to-talk game now? The two prime reasons are additional revenue and lower churn, says Tole Hart, senior analyst at Gartner.

“Nextel has been very successful with its [DirectConnect] service,” Hart says. “The average [monthly] revenue per subscriber for Nextel is high at $70 last year. . . . That’s much higher than Nextel’s competitors.”

Sprint PCS is the closest, with average per-subscriber revenue of $62, followed by AT&T with $60, Verizon Wireless with $52 and Cingular with $51, he says.

Nextel brings in more revenue because the majority of its customers are business users who tend to spend more on services and use their handsets more often.

Customer loyaltyThe New England Patriots off-field personnel have been using Nextel’s DirectConnect feature for about four years.

“We used to have clunky two-way radios and cell phones among other things that we had to lug around on game day and event days,” says Lou Imbriano, vice president and chief marketing officer for the football team and its Gillette Stadium in Foxborough, Mass.

“Now we have one small device that we use to quickly communicate with everyone on our team,” he says. About 300 employees communicate via DirectConnect on game day, and about 120 people use the service daily.

Imbriano is looking forward to DirectConnect’s expanded reach.

“The national stuff is the best part for us. We do about 40 event days at the stadium, but we also do 150 events outside the stadium throughout New England and other parts of the country,” he says.

While Nextel’s service is more popular with corporate customers and consumers, the majority of DirectConnect users are in field service and trade industries.

“With one hand you click and you’re talking,” Hart says. The ease of use and instant contact has made the service popular with plumbers, construction workers and landscapers.

Although Nextel has a corner on the market, it sees competitors approaching. It doesn’t seem worried.

“Imitation is the highest form of flattery,” Kutrow says. “We’ve demonstrated to our customers a consistent, high-level quality of service over the last several years. Our experience shows we know how to make it work.

“We complete 150 million DirectConnect calls a day on our network,” she says.

When asked if the New England Patriots might consider push-to-talk services from other wireless carriers as new services emerge, Imbriano says, “smart business people never shut doors, but [other service providers] would have to go a long way to beat out Nextel. . . .We wouldn’t be a test case for anyone.” n