P2T over cellular works out the kinks

When commercial mobile operators such as Verizon Wireless and Sprint launched push-to-talk services in 2003, they were expected to come out swinging, aggressively broadening the walkie-talkie niche Nextel Communications had successfully carved out for itself since 1996. Yet, there has been little fanfare.

While the move to packet networks such as GPRS and CDMA 1xRTT gave U.S. operators a new opportunity in the voice market in the form of voice-over-IP (VoIP) P2T services, performance issues, voice quality and potential network channel capacity have kept most operators from aggressively promoting such services. Without quality-of-service (QOS) parameters in the packet network, these services have been no match for Nextel's iDEN service, which was designed with P2T in mind.

For instance, Verizon Wireless, the first to launch a P2T offering against Nextel in August 2003, swiftly added 100,000 P2T users after the first six weeks of the service's introduction but retreated from its aggressive television advertising four months later. Analysts say capacity was an issue in the network, and Verizon suffered from highly publicized latency issues and a lack of a competitive handset offering.

“It all boils down to network utilization. That is where some big surprises came to people,” said Dennis Ledgerwood, product manager with Spirent Communications, which conducts performance testing of P2T handsets. “Everyone thought that since they had a data network, they could do this. But when they got the phone in there, things went bad. It was the first time anyone tried a real-time data application.”

Nevertheless, Sprint — which recently completed its merger with Nextel — and Verizon surprisingly have added a significant amount of subscribers without actively advertising the service, indicating a market demand for P2T applications, say analysts. The last time Sprint announced P2T subscriber numbers was in June 2004, eight months after it launched its ReadyLink service. At that time, the carrier said it had added more than 270,000 customers despite its minimal marketing effort.

While it appears that a mass-market pricing point and the integration of P2T services with data devices that also include digital cameras resonates strongly with family and youth customers, the real money-making opportunity for carriers could come from attacking Nextel in the enterprise and public-safety markets, the customer segments that heavily rely on P2T services and generate high average revenue per user (ARPU) for Nextel.

Carriers cannot do that today because their P2T offerings take considerably longer to set up than Nextel's Direct Connect, industry specialists regularly find. That's typically not a problem for general consumers, but users who have a high level of reliance on P2T services choose Nextel.

A bigger concern is voice quality, Ledgerwood said. Not unlike some of the early analog police radios, commercial P2T service experiences front-end clipping so that a message of “Don't Shoot” might come across the radio as “Shoot.”

“The VoIP service loses about 10 to 12 percent of words. There is no way to control that,” said Craig Farrill , CEO of Kodiak Networks, which offers a P2T packet solution that travels over an incumbent telephone provider's circuit-switched network to avoid QOS problems. “A data network is not intended for real-time voice communications.”

However, high-quality VoIP P2T services will become a reality for CDMA operators in 2007, when the next revision of 1xEV-DO is commercially available. The new standard, which is an enhancement to existing EV-DO networks and is known as EV-DO Rev. A, supports QOS and includes a larger reverse link — which results in faster data transmission speeds in both directions — to support VoIP services, said Jack Kozick, chief technical officer and director of architecture with Lucent Technology's applications solutions group. Verizon and Lucent recently announced plans to trial EV-DO Rev. A in early 2006, focusing on VoIP and other multimedia applications.

U.S.-based GSM operators Cingular Wireless and T-Mobile have yet to deploy a P2T solution, primarily because a VoIP solution is not feasible via their data GPRS networks, as coverage is sparse and operators such as Cingular have allocated fewer network channels to GPRS, said Bob Plaschke, CEO of Sonim, a developer of IP-based P2T solutions and an active participant in the move to standardize P2T, known as push-to-talk over cellular (POC).

For instance, Cingular has allocated just one channel for GPRS use, while international operators, such as Vodafone — which is actively deploying POC services globally — allocates four channels for GPRS. High-speed data packet access (HSDPA) with QOS won't offer a viable solution either until Cingular rolls out the service faster.

“The networks in the U.S. are not good enough today, and Nextel is too tough of a competitor to beat,” Plaschke said. “The entire North American market has taken a big pass until operators can upgrade.”

Meanwhile, European operators don't have Nextel to contend with, and, led by Vodafone and T-Mobile, are aggressively moving toward implementing the POC standard, which was ratified in March. While the POC standard was invented in the U.S. market, it may end up being perfected outside the U.S. and brought back to the U.S. once networks can support QOS.

The question for U.S. carriers is whether to deploy interim solutions — such as the circuit-switched solution from Kodiak, which, in terms of latency and voice quality, is on par with Nextel's performance — until QOS capability comes along two to three years from now. While Cingular was an original author of the POC standard, the carrier has chosen to deploy Kodiak's P2T solution by mid-October, said sources close to the company. A Cingular spokesman only confirmed an impending P2T launch would include exclusive features not yet available in the market.

Meanwhile, regional CDMA operator Alltel already has deployed Kodiak's solution. Alltel re-launched the service in the second quarter of this year to introduce a larger footprint and indicated the majority of customers using the service were brand new customers, including ex-Nextel customers.

Farrill said Kodiak has several advantages over existing solutions, including Nextel's iDEN, when it comes to features and function. For instance, Kodiak provides “instant conference calling,” which means users can convert a P2T session into a conference call at the push of a button, a service that would assist in tying disparate public-safety networks together since the conferencing capability works with all existing services through the company's Real-Time Exchange system, Farrill said.

“There really is no reason for a Verizon or a Sprint to wait three years for the next evolution of [data-only],” he said. “I think we're having some good discussions about how this could be used, particularly where Verizon is deeply entrenched with U.S. government agencies and bidding on government contracts.”

Sprint Nextel is expected to aggressively move toward a high-quality P2T offering as quickly as possible. The combined carrier plans to offer a phone that works on both the CDMA and iDEN networks in 2006, at the earliest, and it is expected that Nextel's customers will move onto the Sprint network by 2008, assuming the combined company has developed a version of Direct Connect that is as good as what Nextel offers today and can run on Sprint's network.

It's possible then that Qualcomm's P2T solution, known as QChat, could emerge on the combined network. Nextel exclusively licensed QChat technology in 2002 to keep it out of competitors' hands. QChat is a VoIP solution developed for CDMA networks that technically rivals the quality of Nextel service. While Nextel never made a clear commitment to CDMA, it aggressively developed the ability to link the QChat system with its iDEN network.

Sources close to Sprint Nextel indicate the combined carrier is poised to introduce QChat technology once EV-DO Rev. A is commercially available. Sprint and Qualcomm declined to comment. However, Qualcomm said it has been focusing heavily on developing QChat for EV-DO Rev. A.

“The key differentiator of QChat is that it is an application-layer software that is physical-layer aware, and we can take advantage of the multicast feature of Revision A,” said Dave Ross, senior director of business development for Qualcomm's QCT division. “If you have a situation with crowding in a single sector, you don't have to limit the number of users that can be on that group call.”

In the interim, QChat can bridge Sprint's ReadyLink P2T solution and Nextel's Direct Connect iDEN solution. Regardless of whether the combined network uses QChat, ReadyLink or iDEN, the network can integrate with QChat interoperability servers to manage traffic from all three.

All commercial P2T offerings in the U.S. market are proprietary solutions because carriers were anxious to be first to market before the POC standard was completed, but vendors claim their existing solutions can be upgraded to fully comply with standards.

One of the greatest challenges facing P2T services is the continuing absence of interoperability between rival competitors' P2T systems, which results in a lack of P2T-enabled handsets and limits customer use. That is why technological advances such as IP multimedia subsystem (IMS), a SIP-based multimedia architecture that provides signaling services for 3G applications, and the POC standard are critical to the future of P2T. IMS solutions will enable compatibility for standards-based P2T services over a range of devices from different vendors.

“In my mind, P2T services are really valuable when everyone has it,” said Adam Guy, director of wireless at industry research firm Compete Inc. That is why Sprint's merger with Nextel might have the most impact on P2T services, he said, because once integration of the networks is complete, Nextel will be able to tap into an additional base of Sprint's 27 million customers.