Subject: [NEXTEL-1] PoC: There May Be Trouble Ahead

From: [email-masked]
Date: Wed, 26 May 2004 19:47:11 -0400

PoC: There May Be Trouble Ahead
Source: Telecommunications International
Publication date: 2004-05-01
Arrival time: 2004-05-23

Europe
Mobile operators in Europe should not see push-to-talk over cellular
(PoC) as an easy money-spinner. Concerns over ease-of-use (latency),
standardisation, handset availability, pricing strategies and impact on
the network - combined with uncertainty as to whether or not there is
significant demand for this type of service in the first place - are all
issues that need to be addressed.
The excitement surrounding Push-to-Talk (PTT) stems primarily from
US-based Nextel, a mobile operator using Motorola's proprietary iDEN
technology. By offering one-to-many communication at the push of a
button, Nextel has managed to rack up impressive monthly ARPU figures -
US$71 versus a US industry average of US$45, according to Ovum.
However, it's far from certain that mobile operators can achieve
anywhere near that level of performance in Europe. "There's a danger of
reading too much into what Nextel has done," says Carsten Otto, senior
product manager with T-Mobile International. "It has focused on the SME
market, which traditionally enjoys a higher ARPU and lower churn rate
anyway.  There is also more of a 'Walkie-Talkie' culture in the US than
there is here [Europe]." Otto points out that ten million
'Walkie-Talkie' units are sold every year in the US.
Adopting a proprietary technology is also not an option for mobile
operators in Europe as it would be far too expensive. Instead, in an
attempt to fast-track the standardisation process, Ericsson, Motorola ,
Nokia and Siemens submitted a draft to the OMA (Open Mobile Alliance) in
August 2003 for a PTT standard based on packet-switched technology,
known as PoC phase one.
In March 2004, Nokia announced that - due to market demand - it would be
launching its own 'pre-standard' PTT network solution for GPRS networks
in 2Q 2004 as well as releasing its first, commercial terminal with
push-to-talk terminal functionality built in to it - the Nokia 5140.
Nokia has five commercial implementations of its PTT network solution,
though none is in Europe; it says it is conducting trials with a number
of European mobile operators. "When OMA ratifies the standard at the end
of this year, our network solution will only require a software upgrade
to make it compatible [for PoC phase one]," says Thomas Johnsson,
director of communications at Nokia Networks. "Handsets are not
affected."
Ericsson is also scheduled to launch its own pre-standard PoC solutions
for 2Q 2004. "Fully interoperable products, based on PoC phase one, will
be out in the marketplace by the end of this year," says Niclas Medman,
marketing manager for Ericsson's business unit systems and responsible
for promoting the vendor's 'Instant Talk' product.
T-Mobile's Otto, no doubt drawing from past experience of handset delays
for GPRS and WAP, does not share Medman's optimism. "I don't expect
interoperable terminals and systems, based on OMA, to be available
before 2H 2005," he says.
Adrian Scrase, CTO with ETSI, believes PoC standardisation work within
the OMA still has a long way to go. "[PoC] standards will not be
complete until the end of this year at the earliest," he says. "First
drafts are only available now, so why would operators go for
pre-standard solutions? Most operators will need convincing that the
early implementations can be aligned with future standards."
End-users will also need convincing that it is a service worth having.
"To start a PoC session could take up to eight seconds, with two-second
delays for voice once the session is started, " says Steve Griffin,
senior consultant with PA Consulting. Griffin points out (using
satellite links as a rough guide to user acceptability) that any latency
over 400ms is unacceptable. However, as a full duplex (two-way) service,
expectations for satellite users may well be higher than those
subscribing to a half duplex PTT service.
Ericsson's Medman disagrees with Griffin's latency numbers. "Our system
has delays of only 1-2 seconds for session set-up," he says. "I can
assure you, these are not dream figures." Otto, however, sides with
Griffin. "What we're finding is latency delays for session set-up of
between five and seven seconds," he says.
- Ken Wieland

Copyright Horizon House Publications, Inc. May 2004
Publication date: 2004-05-01

© 2004, YellowBrix, Inc.
http://cnniw.yellowbrix.com/pages/cnnmoney/Story.nsp?story_id=51565677&ID=cnnmoney&scategory=Business+and+Finance&

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