Kodiak Networks CEO pushes talk

New push-to-talk technology in mobile-phone networks could help business people use their time more effectively and consumers have far greater interaction with each other. That's the key message of Craig Farrill, chief executive officer of Kodiak Networks Inc., a company in the fast lane to capture a share of the emerging market for instant voice communications.

Farrill knows a bit about the needs and wants of mobile users: He formerly served as chief technology officer of what is now known as Vodafone Group PLC, Europe's largest mobile phone company.

In his current role, Farrill aims to help mobile phone companies squeeze more revenue out of their existing second-generation (2G) digital networks and create new revenue streams from their pricey third-generation (3G) networks as they go online over the coming months and years.

Kodiak provides an all-IP (Internet Protocol), packet-switched system that can be deployed on existing second-generation GSM and CDMA (Code Division Multiplex Access) networks, as well as next-generation WCDMA (Wideband CDMA) and CDMA2000 networks.

Push-to-talk technology, akin to a walkie-talkie, allows users to communicate simply by pressing a button. But Kodiak's systems offer additional features, such as voice conferencing, voice messaging and the ability to see the availability of other users.

Several operators have already deployed the San Ramon, California, manufacturer's push-to-talk technology, including Orange SA and Alltel Corp.

In a telephone interview, IDG News Service spoke with Farrill about the rise of push-to-talk, its advantages for users, particularly those in the enterprise space, and market potential.

IDGNS: Why all the talk about push-to-talk these days?

Farrill: This form of instant communications is creating a renaissance in voice service. It's all about faster calls, group calls and availability. We make it possible, for instance, to set up calls in two to three seconds, instead of seven or 15 or even 30 seconds with dial-up connections. What's more, you can see who's available. Why waste time dialing people when you can see they're not around to take your call?

IDGNS: Is this service something businesses could really use or is it more of a consumer play?

Farrill: The enterprise market, in my opinion, will be extremely interested in instant voice communications. There is much pressure in these environments to get more done faster and with fewer people. Most people today work in teams but they're seldom together in one location. So instant voice communications is a way to bring them together quickly and effectively.

IDGNS: Can you give an example?

Farrill: IBM (Corp.) is using the Orange service in Europe. One of their salespeople recently was trying to land a big deal. To close the sale, he needed to speak with several sales leaders to get a quick confirmation on pricing. With the service we've implemented for Orange, he was able to see on his mobile phone who was available and organize a group call in seconds. Within a few minutes, he had a decision -- and closed the deal.

IDGNS: And what about consumers?

Farrill: I think instant voice communications is a great way to communicate with family and friends. Nextel, which made a name for itself with push-to-talk in the blue-collar market, has launched a youth and consumer service. This is proof that push-to-talk is not unique to vertical markets, such as plumbers and electricians; it's attractive to all markets -- blue-collar, white-collar and consumers alike.

IDGNS: Couldn't push-to-talk take a big bite out of carriers' relatively lucrative SMS business?

Farrill: I don't think so. SMS is really a replacement for e-mail, providing information in non-real-time. But there's a hierarchy of value here; SMS is at the bottom of the scale. Moving up the ladder is a simple push-to-talk call, then a GSM call, and at the top is a premium GSM instant call, with all the quality of GSM, plus instant conferencing, availability and voice messaging. Push-to-talk provides a more complete communication than SMS. I think many people would be willing to pay more to open up a channel and hear a person's voice and the emotional content, rather than just read their words on a screen.

IDGNS: So you don't see a cannibalizing effect?

Farrill: No, instant communications are premium services; customers pay for speed and quality. SMS is at the bottom of the price table, while a premium GSM instant call is at the top. This sort of call will generate additional revenue.

IDGNS: What exactly do customers get for the added expense?

Farrill: A lot. First, they get a wide range of new voice services: one-to-one and one-to-many instant calling; instant availability to check the presence of co-workers, friends and family; full two-way instant conferencing; and instant voice messaging. And second, all these come with guaranteed quality of service. This means the service is totally reliable -- it's there the second a customer hits the button.

IDGNS: How do you provide this quality of service?

Farrill: In a couple of ways. With the many existing second-generation GSM and CDMA networks out there, we're taking advantage of their proven and reliable circuit-switched technology by using a dedicated channel. With new packet-switched 3G networks coming online, we'll take advantage of their faster channels that offer up to 384K bps (bits per second).

IDGNS: And what about 2.5-generation GPRS, which bridges these two network technologies?

Farrill: We believe GPRS isn't reliable enough for instant voice communications; squeezing voice through a 5K bps channel is extremely difficult. In our initial conversations with mobile phone operators two years ago, they told us they wanted faster and better mobile voice service.

IDGNS: Although your technology is designed to run on 3G networks, you seem to have a focus on 2G networks. Why?

Farrill: To clarify, we've designed a system that supports 2G, 2.5G and 3G because network operators are using 2G and 2.5G now. We can do a pure 3G-based push-to-talk solution if customers want one because our technology is all packet-switched. This isn't the point, however. I have no motive to push mobile phone operators to purchase new 3G overlay infrastructure. Rather, I want to help them make more money with equipment they already own. The many 2G networks out there in the market are going to be around for another decade or more and will continue to provide the same stable and rock-solid performing voice and low-speed data service that they deliver today.

IDGNS: Push-to-talk standards seem to be an issue. Are they a hurdle for you?

Farrill: No, they're not. We are the least proprietary because we are using the most industry standards of anyone in this sector. If we weren't using standards, we wouldn't get anything to work. The Open Mobile Alliance is working on a Push-to-talk-Over-Cellular (POC) standard, and we are committed to Orange to add a 2.5G server when the standard is completed.

IDGNS: How large is the market for push-to-talk?

Farrill: I feel that 2004 will be the year for commercialization of push-to-talk in every region of the world. We predict that within three years, 30 percent of all mobile phones owners will use some form of push-to-talk or instant-voice service.

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