Push-To-Talk
Provided by PA Consulting Group
By Steve Griffin, Wireless Technology consultant with PA Consulting Group.
Mobile operators across Europe are asking themselves how they can open up and stimulate new markets and revenue streams. In particular, operators are becoming more ambitious in driving up data services and revenues – figures often seen quoted are targets of 20% of revenue from data by 2005.
One potential new service that is creating a stir at the moment is Push-To-Talk (PTT). It's an innovative Voice-over-Data service, which provides a distinctly new user experience and has proven market success in the USA.
European operators are currently investigating whether PTT could be the next 'Big Thing' after traditional voice and SMS. Key in determining this is understanding factors such as the ability of existing networks to carry this traffic, and the tariffs and markets that will be targeted. In this article we explore these issues.
PTT is a genuinely new service
PTT provides users with a distinctly different user experience to traditional voice, delivering a 'walkie-talkie' style service, ie only one person can talk at a time. However, it is not limited in distance as with normal walkie-talkies, as the conversation is carried across the mobile network.
Other key features of the service mean that users immediately recognise it as different from 'normal' voice.
• group calls are possible as well as one-to-one calls (but still only one person can talk at a time)
• presence information is normally associated with this service, so users can see on their phone screen whether other people are logged on to the PTT service and will therefore be available if called
• PTT voice services are typically priced below normal mobile phone calls (but obviously this is a marketing issue)
• call hold times are typically much shorter - the walkie-talkie style of speech lends itself to the short, snappy transfer of specific information, rather than normal lengthier conversations
• the 'always-on' nature of data networks makes for near instant call setup times that make it very easy to use.
However, PTT potentially comes in two different flavours - the first is a real-time, conversational style service, where the delay across the network is small enough to allow people to speak and receive responses in a short enough time (eg less than 1 sec) to allow a normal two-way (or group) dialogue to take place. It is this low-delay PTT service that has proven successful in the States.
The second flavour of PTT is a messaging-style service, where the delay across the network is large enough (eg greater than 5 sec) to not allow normal conversation to take place. This flavour has been described as a 'Voice Instant Messaging' service.
Existing networks may need optimisation before PTT can work
The difference between the two flavours of PTT described above is tied into the underlying network technology and how delay can be minimised through operators' networks. Technically, PTT voice traffic is carried over packet data networks and so is applicable to GPRS and UMTS networks in Europe.
This raises certain technical issues that cannot be separated from the user experience and the time scales for the introduction of PTT services. The most important of these issues relates to Quality of Service (QoS) in general and specifically to delay (also called latency) in packet data networks.
GPRS networks do not support QoS and operators will not be able to guarantee delay through their networks if offering PTT over GPRS - the fear is that PTT over GPRS will not realise the 'conversational' style of service that is already successful in the States. However, there are mechanisms by which operators can optimise their GPRS networks to minimise delay, and with careful design a real-time, conversational-style PTT service should be possible.
The guaranteed QoS required for a real-time service could persuade operators to wait for 3G IMS (IP Multimedia Subsystem) networks, but this may mean not offering commercial PTT services for some years yet.
The outcome of this is that PTT is a service that cannot be divorced from the underlying technology and networks - the earlier this is recognised and accepted, the earlier operators can work to overcome the current weaknesses and offer customers the service they really want. Therefore, one of the technical keys to an early success for PTT will be optimising today's GPRS networks to support a near real-time service and allow a conversational-style service to be offered to today's users.
Why are operators getting excited now? - The Nextel experience
Mobile operators are getting excited because PTT is already a proven market success with Nextel in the USA. Nextel pioneered PTT services in 1996 with their Direct Connect service and their figures make impressive reading:
• Nextel's ARPU is $70-$75 per month, the highest in the USA. This is about 15% higher than their US competitors and twice the average Western European ARPU
• Nextel have extremely high customer loyalty, with a subscriber churn of less than 2%
• although Direct Connect is an optional service for Nextel's customers, about 95% of their customers have signed up for it.
Added to these figures is the fact that Nextel's primary market and customer base covers the very attractive corporate and SME/SOHO sectors. Also, Nextel are now starting to target the youth market with its 'Boost' service.
As well as delivering the PTT features described above, the success of Nextel's Direct Connect service is based on further enhancement of the basic service itself. The first of these enhancements is the 'Fleet' concept - this supports the needs of special user groups, allowing subscribers to set up and assemble groups flexibly, thereby easily making calls within that group or to the whole group.
The application of this is obvious in large accounts with mobile workforces, but the 'Fleet' has evolved to provide a competitive advantage to being part of a particular group - for example, Nextel has seen carpenters, plumbers and builders forming their own groups to get the first call on new work.
The other key development in Nextel's offering are Value-Added Services - rather than seeing PTT as a service on its own, Nextel is addressing specific industry and client requirements by integrating PTT with other data services, eg route analysis, timesheet automation, asset tracking, workflow management, etc.
The wider mobile community is starting to act on PTT
A number of different activities are currently on-going in the PTT arena.
Verizon Wireless launched a rival PTT service in August 2003 on their CDMA network in the US. However, its performance is not currently getting good reviews, with delays across their network turning this into more of a messaging service than a real-time conversational service.
This is one of the key lessons to be learned about PTT - getting the user experience right will be the first and most important factor in its successful introduction into any market.
Other US operators (AT&T Wireless, Cingular, etc) have also stated their intentions to introduce PTT. On the back of this interest, Ericsson, Siemens and Nokia have started standardisation for Push-To-Talk over Cellular (PoC), with the first draft standards out in September 2003. However, these standards are based on the 3G IMS networks and, as mentioned above, commercially rolled-out and stable solutions are in practice still years away. Nevertheless, solutions are still feasible on today's networks and without the PoC standards - various operators and suppliers in the US and Europe are running trials on current systems and networks. However, these are often based on simple client-server architectures that have yet to prove themselves in terms of performance, reliability and scalability.
European operators need to get their strategy right to address the complexities of PTT
European operators are currently trying to decide whether and how PTT can be a similar success on this side of the Atlantic. There is a significant amount of evidence in favour of PTT services from the Nextel example, plus a certain level of 'gut feel' that this should be an attractive service if aimed correctly at the right markets.
In practice, European operators are currently trying to formulate their strategies for these services, as well as carrying out some technology trials. There are a number of key questions that need to be answered in order to arrive at a coherent strategy:
What should the user experience be?
There is a clear choice to be made between offering a near real-time, conversational-style 'walkie-talkie' service (à la Nextel) on the one hand, or a longer delay, voice messaging service.
What will be the impact on existing services?
One of the big fears for operators is that introducing PTT will simply result in cannibalisation of existing voice and/or text messaging services. Operators must see that new service usage (and therefore revenues) will result from introducing PTT.
While voice/text substitution will happen to some extent, new usage should be seen from such sources as second tier PMR-like usage, fixed/wireline substitution, the 'drawn into' effect of needing to join particular groups, etc. In practice, the experience from Nextel is that PTT can be a complementary, rather than competing, service.
How should pricing be set?
Overcoming the perception of mobile calls as expensive could be key to the success of PTT - the opportunity for significant fixed/wireline substitution is there if the pricing policy is correct.
Which markets should be targeted?
Operators need to decide for themselves whether PTT services should be aimed at the general consumer market, or at specific target markets:
• corporates - find it cheap, efficient, and appreciate the near-instant call setup and short conversation times
• mobile workforces and fleets (eg taxis, haulage, etc) - would like the group calls, dispatch office use and integration with value-added data services
• the youth market - find it fun, cheap, enjoy the group calls and the walkie-talkie style of service.
Furthermore, the questions above are all inter-linked to some extent - user experience affects service usage, which to some extent dictates pricing policy, which in turn impacts the target markets. This complexity explains why setting the strategy and realising the outline business case for PTT is not a simple exercise.
However, for those who get it right, the potential is to realise a major new service that will change the user behaviour, attitude and perception of mobile communications.
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