Subject: [NEXTEL-1] Sprint PCS Ready Link: Not a Threat to Nextel

From: [email-masked]
Date: Thu, 20 Nov 2003 17:31:37 -0500

Sprint PCS Ready Link: Not a Threat to Nextel

What's Happening: Sprint PCS launches Ready Link, a push-to-talk 
service. Two models of color-screen phones are available, both from 
Sanyo. We expect a third model by year's end.

Our Take: Sprint PCS' Ready Link push-to-talk (PTT) service is  a 
viable  compliment  or alternative to Nextel's Direct Connect 
system - albeit under certain conditions, such as where extended 
coverage and traditional voice calls are mandatory but the need for 
PTT (short, quick, direct communication) is optional or infrequent. 
Sprint PCS could benefit by attracting Nextel subscribers who use 
their handset more as a cell phone than a walkie-talkie and who have 
wireless contracts about to expire.

Action: SMEs, blue-collar workers (e.g., plumbing, construction, 
electricians) and public safety are well advised to stick with 
Nextel's Direct Connect. Enterprises with Sprint PCS contracts may 
be able to drop Nextel IF PTT is not a mission-critical application 
and IF they test Ready Link for at least 30 days.

Summary: The Sprint PCS Ready Link service is "good enough" in terms 
of connect times and overall performance. However, CIOs are well 
advised to trial the Ready Link service for at least 30 days before 
making the move. That advice is driven by our concern that Sprint's 
PTT service is only as reliable as its network. Despite the marked 
improvement, we have seen during 2003, the Sprint PCS network is 
still subject to higher call completion failures and dropped calls 
in many of its service areas than its competitors. Even though Ready 
Link uses Sprint's 1xRTT data network, we believe voice and data 
performance go hand-in-hand because the two networks share 
infrastructure and spectrum. Therefore, we expect the data network 
to deliver PTT performance on par with the voice network's sometimes-
lackluster performance.
 
Based on our limited tests, although Ready Link has faster connect 
times than Verizon's PTT service, it still does not represent a 
threat to Nextel's core market. Those users' primary need is brief, 
person-to-person communication rather than traditional voice calls. 
The needs of Sprint's core subscribers are just the opposite. The 
companies will do battle by touting issues such as coverage and call 
quality vs. PTT performance.

The Rest Of The Story: Sprint's and Verizon's expansions into PTT 
are attempts to differentiate themselves by offering more than the 
usual slate of voice mail, call waiting and text messaging. However, 
we believe that PTT won't be a differentiator for long because over 
the next 12 months, all of the six largest operators will offer some 
form of PTT or push to message (PTM). During that time, the PTT/PTM 
market will break into two camps: fast PTT services such as Direct 
Connect and higher-latency or deferred delivery (e.g., store and 
forward) PTM services. The latter will appeal primarily to users who 
want IM-type services but don't want to buy special PTT phones. 
Through 2004, consumers and enterprises should consider PTT and PTM 
as works in progress.

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