Two years ago, the telecommunications market was mired in recession, and wireless applications like video and imaging were a distant dream. US analysts tried to understand what magic made Nextel Communications’ (Nasdaq, XETRA: NXTL) average revenue per user (ARPU) 35% higher than its competitors, and its churn especially low, compared with the US wireless market. The analysts discovered that a service called push-to-talk (PTT), which Nextel had been providing since 1996, had suddenly become a hit.
Nextel’s system is based on iDEN technology developed by Motorola (NYSE: MOT). IDEN technology makes it possible for the first time to combine communications and telephony systems in a single device. The technology is actually Motorola’s proprietary version of a standard called terrestrial trunked radio (TETRA). Israeli company MIRS Communications began providing TETRA-based services in 1994.
”Motorola’s PTT is based on combining two systems in one device: a radio system and a wireless system,” explains MIRS deputy general manager - engineering Zvika Kanfer. “One is designed for wireless communications, and the other is designed for advanced wireless communications.
”It works like a walkie-talkie. Pressing a button sets up a direct communications channel to another subscriber, or to a group of subscribers. One of the more popular PTT applications is a kind of voice short messaging service (SMS). Instead of typing a message, you deliver a voice message to one or more recipients with the push of a button.”
In August 2003, Verizon Wireless launched a wireless PTT service, using a slightly different technology, called PTT over cellular (PoC). Sprint PCS (NYSE: PCS) soon followed suit. End-user equipment manufacturers got into the act: before the 3GSM World Congress 2004 in Cannes in February, Nokia (NYSE, LSE, HEX: NOK), Sony Ericsson Mobile Communications, and Motorola announced that their phones would support PoC, and Siemens (NYSE: SI; XETRA: SIE) also recently joined the race.
The main difference between Nextel’s PTT system and Verizon Wireless and Sprint PCS’s PoC system is that Nextel uses a solution based on an iDEN platform, while Verizon Wireless and Sprint PCS use a different PTT Motorola-designed platform, based on data communications. On this platform, a PTT call is made by creating compressed digital voice files, and transmitting them with voice over Internet protocol (VoIP) technology.
The solution that Motorola is providing to Verizon Wireless and Sprint PCS is based on technology designed by a start-up called Winphoria Networks, acquired by Motorola. Verizon Wireless is already marketing the service very aggressively, particularly to teenagers. In Israel, Pele-Phone will provide PTT service using Winphoria’s platform.
MIRS claims that while PTT is based on wireless technology working in tandem with a wireless network, PoC technology is very similar to data communications over wireless Internet. Pressing a button creates a digital recording, which is transmitted by packet switching. MIRS adds that PoC systems are less reliable; the advantage of PTT is that the devices employed are more durable and reliable, making use of existing wireless technology, and two separate systems.
One advantage of POC, in comparison with PTT, is that PoC is based on an IP platform. This platform enables operators choosing PoC to provide services designed for the private market. Among other things, PoC makes it possible to provide presence services, in which users can designate themselves as not available. Additional future services include various PoC ringtone options, PTT voice mailbox, etc.
Examples of applications that can be used simultaneously on telephones with PoC capabilities are already visible. There are telephones that can already be hooked up to instant messaging (IM), and which include presence elements. The combination of PoC with other services, such as IM and presence, is based on an IP multimedia sub-system.
MIRS responds that PTT can broadcast a "subscriber unavailable" announcement, and that in the future, there will be additional solutions, including a range of ringtone options in case of an emergency call, as in the recently launched state-of-the-art handsets.
Wireless industry sources told “Globes” that the difference between PoC presence service and PTT presence service is that PoC service is integrated with the standard, while with PTT, the system must adapt itself in order to process the presence data, and carry out integration. Integrating the presence service with the PoC standard enables the operator to add a wide variety of capabilities in current and future applications, such as the ability to discontinue a subscription to an information channel, etc. Furthermore, the subscriber’s presence status is automatically updated in the operator’s global presence system. The availability for service is thereby automatically updated when the subscriber enters the PoC service.
”IDEN is a designated network established specifically for PTT service, while PoC is actually an additional service on an existing network” a wireless industry source explains. “For that reason, every operator that has a data communications network can launch the service, without setting up a new network.”
At this stage, wireless operators are providing the basic PoC service as means of countering other operators providing the service on iDEN infrastructure. For the moment, ordinary voice calls are being combined with information channels, IM, and games. Other applications are expected in the future.
Wireless industry sources stress that while ordinary wireless devices are capable of transmitting wireless calls together with an SMS message, but do not handle other simultaneous operations, the PoC platform is capable of running several services simultaneously. It makes it possible to provide a combination of services with prompting, enabling subscribers to receive instant messages during a PoC call, and so forth. This capability is made possible, among other things, by the fact that PoC is based on IP networks.
One of the drawbacks of PoC is that communication between telephones made by different manufacturers is still not complete. PoC’s potential will be fully realized after a uniform standard is established. Wireless industry sources say that PoC is currently a standard in the process of being formed. Certain parts of the standard are already on the market, while others will get there in the coming years.
”The Open Mobile Alliance (OMA) is currently completing the definition of the standard,” a wireless source explains. “The OMA is defining services like IM and presence as part of the PoC standard. The standard is due to be completed soon, and it can be assumed that all devices will be able to communicate with each other, and with all systems.”
Meanwhile, wireless operators in a rush to launch services are obliged to go to market with certain components that use a solution not yet included in the standard. Since the demand for the service preceded the standard, some communications equipment manufacturers have begun selling proprietary systems. These systems, however, are not significantly different from the future standard. The speed of progress in standardization now depends to a great extent on the wireless operators.
Furthermore, some claim that PoC technology is still immature. That fact that wireless networks are being used to transmit data is liable to harm the ability to conduct a PTT call, and affect call stability and reliability. PoC transmits PTT applications on data channels in VoIP, i.e. on the same channels used for data and video applications.
As a result, PTT applications compete with video, ring-tone, imaging, and other applications for bandwidth of the same wireless cell. IDEN technology, on the other hand, has a separate channel for PTT applications, and the necessary network resources are therefore available.
Wireless industry sources claim that quality of service (QoS) and IP issues for enhanced data rates for GSM evolution (EDGE) and wideband code division multiple access (WCDMA) networks will determined by market needs. The technology may be in the early stages, but the road map is already clear.
Nokia recently announced that its system did not meet security standards, and was unsuitable for users in the intelligence and defense sector. Wireless equipment manufacturers designed their devices for private users, not security and rescue services. PoC may not meet the requirements of security and rescue services, but it was not designed for them. In Israel, Nokia is expected to provide the service through wireless operators Cellcom and Partner Communications (Nasdaq:PTNR; TASE:PTNR; LSE:PCCD).
The main disadvantage of PoC, however, is birth pangs, such as the system’s slow response times, which cause long gaps during calls and when making calls. With PTT, pressing a button launches the call immediately, while with PoC, several seconds pass between the pressing of the button and the call launch. The service provided by Verizon Wireless and Sprint PCS, for example, suffers from very long delays.
Wireless sources told “Globes” that Verizon Wireless and Sprint PCS’s PoC system is based on a CDMA network, and the delay is caused mostly by the network technology, not the PoC system. They said the system is expected to gradually improve. In any case, it is reasonable to assume that if Verizon Wireless and Sprint PCS thought that the service was poor, they would not have launched it. Furthermore, the service is making progress in several areas. One of the most important of these areas is the possibility of making PoC calls with roaming service. Since PoC is based on VoIP, the price of roaming services can be substantially reduced.
One provider of PoC solutions is Kodiak Networks, which has developed a PoC system that operates using circuit switching. This solves the problem of PoC’s slow and unreliable data communications. The solution is already being successfully applied in the US, after being purchased by Alltel Corporation, and is being marketed by several European wireless operators affiliated with Orange (LSE: OGE; XETRA: ORA), including Orange France and Orange UK. One drawbac Kodiak’s technology is that it is a proprietary solution.
Published by Globes [online] - www.globes.co.il - on July 13, 2004