Push-to-talk could push Europeans to chat more

Janni Mpaltatzis, a Greek citizen who has spent most of his life in Germany, can't wait for the new wireless service to come to Europe. Already a heavy mobile phone user, Mpaltatzis views push-to-talk technology -- similar to the walkie talkie-type service pioneered by Nextel Communication Inc. in the U.S. -- as an ideal way for him to communicate with co-workers and customers, as well as family and friends.

"I make a lot of short calls every day, mostly to colleagues and customers but also to my wife, kids and close friends," said Mpaltatzis, who spends nearly 12 hours a day away from home delivering pork chops, hams and other products from his father-in-law's meat processing company in Dortmund, Germany. "It would be great just to push a button to reach them instantly or, if they aren't available, to push the same button to leave a message. And it would be really neat to communicate this way with my relatives in Greece someday."

That someday is just around the corner. Mpaltatzis and millions of other European mobile phone users like him will soon be able to subscribe to new push-to-talk services as wireless operators around the continent move to create additional voice revenue streams.

"Unlike U.S. operators, which have been very aggressive in offering bundled minutes at huge discounts and other services to increase the volume of their voice business, European operators have been less willing to slash prices and, as a result, have seen their voice traffic stagnate; they need to offer new 'rich' voice services, such as push-to-talk, to generate additional revenue," said Phil Kendall, senior analyst at Strategy Analytics Ltd. "I can't imagine many, if any, European operators not interested in the service."

Orange Personal Communications Services Ltd. is poised to become the first mobile phone company in Europe to offer push-to-talk. The U.K. operator, a subsidiary of France's Orange SA, will begin offering service initially to business users in the country next month. Orange will extend the offering to France in the second quarter and eight other markets in the course of the year. The group also plans to target consumers when sufficient handsets are available. Service in the U.K. will start with only one: the Treo 600 from PalmOne Inc.

To get a jump on the rest, Orange has chosen to introduce a push-to-talk service over its voice-centric, circuit-switched GSM (Global System for Mobile Communications) network, using technology from Kodiak Networks Inc. in San Ramon, California. Most European operators planning to introduce push-to-talk, however, are considering a packet-switched technology, which is in the final stages of standardization.

"The circuit-switched system gives us an early-mover advantage," Pond said. "It's a good way to get into the market early, show customers the benefits and gain experience."

Orange's service, called Talk Now, is designed to offer customers instant voice and messaging services. Users, for instance, will be able to reach one or more contacts from their list immediately, and if that person or group of people isn't available, can send a voice message instead -- with the touch of a button.

Other advantages of the circuit-switched service over the planned packet-switched alternative, according to Orange, are lower call latency and higher voice quality, as well as the ability to transform a half-duplex walkie-talkie call (where one person presses the button to talk while the other releases to listen) to a full-duplex cellular call (both can talk at the same time without having to press buttons).

"Because a walkie-talkie call is established on a full circuit-switched basis, you can easily choose to upgrade to a normal two-way traditional telephone call," said Ian Pond, vice president of customer marketing at Orange. "This function moves the service beyond a command-and-control blue collar environment to a while-collar business environment where you can have conference calls."

Should Orange opt later to introduce a packet-switched push-to-talk service, Pond doesn't see a migration problem. "We may want to migrate all our push-to-talk customers to a voice over IP (Internet Protocol) solution, but then again we may decide to allow certain customers to continue with the circuit-switched solution if they're happy with it and move others to the packet-switched one," he said. "We can't say right now which way we'll go."

Though the first to offer push-to-talk service in Europe, Orange will hardly be the last. Almost every major mobile phone company in the region is currently testing the technology, mostly the packet-switched variant. Many are expected to announce their roll-out plans in the coming months -- a couple, in fact, as early as next week at the 3GSM World Congress in Cannes, France, according to one vendor.

Push-to-talk technology can be a relatively inexpensive, simple way to use mobile phones for immediate voice communications. In its simplest form, the technology allows customers to use their mobile phones as walkie-talkies. By pressing and holding down a button, they can talk instantly to one or more participants without having to make a time-consuming dial-up call.

For heavy users, it could even keep costs down, as push-to-talk pricing is really about monthly flat rates, according to Strategy Analytics' Kendall. Operators, he said, need to charge a subscription fee that is, on the one hand, high enough to avoid cannibalizing their cash-cow voice service but, on the other, low enough to draw people to the service. "I can imagine monthly flat rate fees between

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